In this paper fast video vector quantization algorithm was developed utilizing high correlation between successive frames which can be used for motion compansation as a next step. Best matching code vector search speed is increased using previously encoded frame code vector index list, which carry the available information of that frame. By using interframe correlation, search speeds of tree structured vector quantization (TSVQ) was achieved Additionally the coding structure developed here is directly applicable to motion estimation (ME) and motion compansation. (MC) The main objective of this work is real time video encoding using high calculation power of server computer and at clients side requiring very low computation power, meanwhile requiring low electric energy. The algorithm developed here is very suitable especially for mobile equipments which can cary only limited electric power on it.