Bit rate control is an important issue for wireless and Internet video streaming. This paper presents a revised rate control scheme based on an improved frame complexity measure. Rate control adopted by both MPEG-4 VM18 and H.264/AVC uses a quadratic rate-distortion (R-D) model that determines quantization parameters (QPs). Classical quadratic R-D model is suitable for MPEG-4 but it performs poorly for H.264/AVC because one of the important parameters, mean absolute difference (MAD), is predicted through a linear model, whereas the MAD used in MPEG-4 VM18 is the actual MAD. Inaccurately predicted MAD results in wrong QP and consequently degrades rate distortion optimization (RDO) performance in H.264/AVC. To overcome the limitation of the existing rate control schemes, we introduce an enhanced linear model for predicting MAD, utilizing some knowledge of current frame complexity. Moreover, we propose a more accurate frame complexity measure, namely, normalized MAD, to replace the current use of MAD parameter. Normalized MAD has a stronger correlation with optimally allocated bits than that of the predicted MAD. Finally, a dynamic bit allocation scheme among basic units is implemented. Extensive simulation results show that our method, with inexpensive computational complexity added, improves the average peak signal-to-noise ratio (PSNR) considerably by up to 1.2 dB and reduces PSNR variances significantly by up to 63%.