A new region-based frame interpolation algorithm is proposed based on the segmented motion layers with planar perspective motion models. It is shown that performing the motion model interpolation in the homography parameter space is equivalent to interpolating the parameters of the real camera motion, which requires decomposition of the homography matrix, under several practically reasonable assumptions. Based on this reasoning, backward and forward motion models from the interpolation frame(s) to the original frames of the sequence are estimated for each motion layer. Layer support maps at the point(s) of interpolation in time are generated by using these interpolated motion models and the layer maps of the neighboring original frames. Finally, pixel intensities of the interpolation frame are determined by a series of conditions on the layer occlusion relations and the intensities at the transformed locations of the original frames. Experimental results show that the proposed algorithm achieves visually pleasing results without blur or halo effects on dynamic scenes with complex motion.