In the current video coding standards, rate-distortion optimization (RDO) plays an important role in achieving best tradeoff between the perceived distortion and transmission rate. It is widely used in all kinds of encoder decisions, including block mode decision, motion vector selection and so on. Generally, the sum of absolute difference (SAD) or the sum of square difference (SSD) is used as the distortion measurement. However, it is well known that both of them cannot always reflect the perceptual quality of the encoded video. In this paper, an objective quality measurement structural similarity (SSIM) index is proposed as the distortion measurement in the RDO framework for video coding standards. By fully exploiting the relationship between SSIM and mean square error (MSE), the SSIM-based RDO framework can be approximated by the original SSD-based RDO framework with only a scaling of the Lagrange multiplier. Experimental results show that the proposed method outperforms the latest H.264 codec and also the state-of-the-art SSIM-based RDO video codec. © 2014 IEEE.