An adaptive modification to the two-bit transform-based low-complexity block motion estimation approach is proposed. Initially, video frames are converted into two-bit representations using the two-bit transform (2BT), and binary block-based motion estimation is performed using these two bit-planes. Modification to the original 2BT-based motion estimation scheme is introduced by conditional local or full searches using the mean absolute difference criterion to improve the initial motion estimation accuracy. The condition threshold is adaptively varied according to block detail using the block variance already computed for the 2BT process. Experimental results show that the proposed adaptive modified 2BT-based motion estimation technique can significantly improve peak signal-to-noise ratio performance compared with 2BT only motion estimation, and outperforms modified one-bit transform (1BT)-based motion estimation as well as modified 2BT-based motion estimation without adaptation at the same motion estimation cost. The main contribution of this work is to provide an adaptive decision on whether a modified search should be carried out after the low-complexity motion estimation process.