A method and system for contour-based motion estimation for use with video images. The invention establishes corresponding contours (404, 414) in two images (402, 412) in a sequence of images, determines a motion vector which includes how the first contour (404) moved to become the second contour (414), and transmits the motion vector of the contour (414) in order to permit accurate display of the second video image (412). Preferably, boundary lines are removed from the contours before a comparison is made. The invention is computationally efficient and economical from a data transmission point of view, while enabling the production of accurate image.