A balanced vector-quantization (VQ) processor has been developed for real-time encoding of motion pictures (640x480 pixels) by using FPGA. The VQ processor employs a search algorithm for VQ encoding to reduce computational complexity and hardware volume. And this VQ processor employs a new architecture of distance calculation unit. By adopting the pipeline composition of each element, the number of distance calculation units could be reduced compared with fully parallel hardware architecture. Besides, in order to reduce memory size of codebook, 2048 template vectors consist of 512 basic template vectors, and the distance calculation units using pipeline composition are arranged in parallel for rotated template vectors. As a result, real-time VQ processor on FPGA is balanced architecture compared with the fully parallel architecture.