The MPEG video coding is the most widely used video coding standard which usually generates variable bit-rate (VBR data streams. Although ATM can deliver VER traffic, the burst traffic still has the possibility to be dropped due to network congestion. The cell loss can be minimized by using an enforced rate control method. However, the quality of the reproduced video may be sacrificed due to insufficient peak rate available. In this work, we propose an end-to-end quality adaptation mechanism for MPEG traffic over ATM. The adaptive quality control (AQC) scheme allocates a certain number of coding bits to each video frame based on the network condition and the type of next frame. More bits may be allocated if the network condition, represented by the connection-level, is good or the next frame is B-frame that usually consumes fewer bits, A high connection-level allows a relatively large number of tagged cells, which are non-guaranteed in delivery, for video frames with high peak rates. The connection-level adjustment unit at the encoder end adjusts the connection-level based on the message of the network condition from the quality monitoring unit at decoder. The simulation results show that the AQC system can effectively utilize the channel bandwidth as well as maintain satisfactory video quality in various network conditions.