A fast mode decision algorithm is proposed in this paper to accelerate the process of transcoding videos into H.264with arbitrary rate spatial resolution down-scaling. The proposed algorithm consists of three steps. First, an early-stop technique is introduced to determine the 16× 16-mode blocks, which take up about 70% of all the macroblocks; then, a bottom-up merging process is performed to determine the mode of rest non-early-stopped blocks; and then, we adopt half-pixel motion estimation to further refine the acquired predictive motion vectors. In order to obtain the predictive motion vectors for early-stop and merging processes, we propose a motion vector composition scheme, which can reuse the information in the input pre-encoded videos to handle the spatial resolution down-scaling. Experimental results showed that our algorithm is about four times faster than the Cascaded-Decoder-Encoder method and has negligible PSNR drop and little bit rate increase.