Video images including a fade transition are encoded using inter-frame prediction. A fade detector is provided to detect a fade transition by way of analyzing incoming images successively applied thereto. The fade detector generates first information indicating if the fade transition is fade-in fade-out, and also predicts fade duration and then generates second information indicating the predicted fade duration. A bit amount adjuster is provided to adjust allocated bit amount during fade using the first and second information. A motion image encoder is provided to encode the incoming images using the number of bits which has been determined by the bit amount adjuster.