Although the coding modes of H. 264 coded video would be changed by the transcoding process of spatial resolution reduction, there exists good correlation in prediction modes and prediction directions between input and output video. In this paper, we first introduce a new spatial resolution reduction transcoding architecture of intra coded frames where the distortion can be calculated directly in compression domain. We then propose a fast mode decision algorithm in which only a small part of rate distortion optimization (RDO) calculation is needed for mode decision. For 4 × 4 luma block, the proposed scheme has average 21.3% computation saving, compared to the cascaded pixel-domain transcoding scheme with the fast intra mode decision algorithm proposed in JVT-G013[11] . For 16 × 16 luma block, RDO calculation is completely avoided in our scheme while the scheme in JVT-G013 needs 2 RDO calculations. Experimental results show that our scheme outperforms that of JVT-G013 in terms of significantly computation savings with negligible loss of PSNR.