In this paper, we propose a hybrid scheme which incorporates the block motion compensation (BMC) scheme in the overlapped block motion compensation (OBMC) scheme. The main objective of this hybrid scheme is to improve a pure OBMC system with a lower motion bit rate and a lower search complexity while retaining about the same PSNR level. With this scheme, the encoder can determine the block mode under the tradeoff of complexity and visual quality. Furthermore, the motion bit rate can be reduced by smoothing the motion field of BMC blocks during motion search. Experimental results show that the complexity of both the encoder and the decoder is reduced while the visual quality remains as good as the pure OBMC system.