Owing to the heterogeneity existing in wireless video streaming, such as terminal capabilities, network conditions, user preferences, and the natural environment in which a user is located, rate-reduction transcoding is usually necessary to adjust the coding rate to the available channel bandwidth. We begin this paper by reviewing existing approaches and addressing several issues related to transcoding. Next, two types of rate-reduction coding techniques are studied. The first type is based on standard coding schemes and specifically considers transcoding from MPEG-2 to MPEG-4 with a reduced spatial resolution. A method for drift compensation based on an intrarefresh technique is also presented. The second type of scheme is a rate-reduction transcoder that makes use of frame-level R-D information that has already been extracted at the server before transmission. This R-D-based approach can be applied to architecture simplification, rate control, frame dropping control, and channel adaptive transcoding. We conclude this paper by pointing out that transcoding is an integral part of wireless video streaming because it provides a flexible interface between the wired network and the wireless network. Copyright © 2002 John Wiley & Sons, Ltd.