In this paper, a novel correlation-based motion vector processing method is proposed for motion compensated frame interpolation. We first address the problem of unreliable motion vectors due to low correlation. Unlike other motion vector processing methods using vector median filter, we proposed using bidirectional prediction difference to select the best motion vectors with constraint on increasing motion vector correlation. Furthermore, to reduce the blockiness artifacts while maintaining edges, we use an adaptive vector averaging filter to obtain a finer motion field by taking motion vector correlation into account. Experimental results show that the proposed scheme outperforms other methods in terms of visual quality and PSNR performance.