A new rate control scheme is used to calculate the target bit rate for each frame based on a quadratic formulation of the rate distortion function. The distortion measure is assumed to be the average quantization scale of a frame, The rate distortion function is modeled as a second-order function of the inverse of the distortion measure. We presented a closed form solution for the target bit allocation which includes the MPEG-2 TM5 rate control scheme as a special case. Model parameters are estimated using statistical linear regression analysis. Since the estimation uses the past encoded frames of the same picture prediction type (I, P, B pictures), the proposed approach is a single pass rate control technique. Because of the improved accuracy of the rate distortion function, the fluctuations of the bit counts are significantly reduced by 20-65% in standard deviation of the bit count while the picture quality remains the same. Thus, the buffer requirement is reduced at a small increase in complexity. This technique has bee adopted by the MPEG committee as part of VM5.0 in November 1996.