A system and methods for providing dynamic transcoder rate adaption for an adaptive bit streaming function is described. In a first embodiment, a client may select from all available bit rates during the encoding session, wherein the bit rates are provided to the client via a manifest file from a media gateway. In a second embodiment, a subset of the bit rates are provided to the client, from which a client chooses a selected bit rate. The encoding session continues until a request for a new bit rate is received from the client, at which time a new subset of bit rates are generated. This new subset of bit rates is presented to the client, and this loop continues until the termination of the encoding session.