A method and an apparatus of transcoding image data in a digital TV system are disclosed. The method and apparatus of the present invention performs global and local motion compensation processes while converting the particular data bit rate of input image data to a different data bit rate. As a result, the quality of the image can be greatly improved compared to other existing techniques. When there is no global motion detected in an image frame, the local motion compensation is performed based on new local motion vectors estimated or on the previous local motion information.