The first step of the coding technique proposed in the MPEG standard is motion compensation. It reduces the residual error energy using a fraction of the total bit rate to transmit motion information. Motion compensation is performed using a block matching approach though the algorithm to compute motion vectors is not given in the MPEG standard. Usually, an exhaustive search around the macroblock position is used. This solution (proposed in the test model) gives the lowest error but has the highest complexity. In this work we propose an algorithm that reduces the complexity of the block matching procedure while achieving comparable performance with the exhaustive search. The proposed solution is particularly attractive for the spatially scalable version of the coder when both a full resolution and a spatially downsampled sequence are transmitted. The algorithm uses a multiresolution motion compensation scheme. Exhaustive search block matching is performed in the downsampled sequence and the vector field computed is used as an estimate of the motion vectors for the full resolution sequence. Thus, only a refinement needs to be computed. This allows a consistent reduction of the computation time with respect to exhaustive search at the full resolution level, while the residual error energy increases only slightly.