In this paper, a Modified Complex Lapped Transform domain Motion Estimation (MCLT-ME) method to estimate the motion of video sequence is proposed. The proposed method is based on phase correlation of current window region and corresponding window region, and provides a significant improvement in motion estimation. In this paper, a Modified Complex Lapped Transform domain Motion Estimation (MCLT-ME) method to estimate the motion of video sequence is proposed. The proposed method is based on phase correlation of current window region and corresponding window region, and provides a significant improvement in motion estimation.