Proposed is an efficient mode decision for H.264/AVC frame-skipping transcoding. In the proposed algorithm, all information including mode, motion vector etc. are reused when the selected best reference frame is not skipped; while an efficient mode decision is employed when the best reference frame is dropped. Experimental results reveal that an average of 70% of computation time can be saved compared to the fully decoding/encoding procedure. Degradation in the rate-distortion performance is fairly small.