A high performance 2D one-bit-transform (1BT) motion estimation algorithm with smoothing and preprocessing (S + P) is introduced in this paper. The 1BT technique is used to transform an 8-bit image into a 1-bit representation image (1BT image). In the 1BT motion estimation algorithm, the 8-bit current frame (c frame) and reference frame (p frame) are first transformed into their 1BT image respectively, before calculating the Sum of Absolute Difference (SAD) and performing the search operations using the Full Search Block Matching Algorithm (FSBMA). In our proposed algorithm, a smoothing threshold. (Thresholds) is incorporated into the filtering kernel, which is used to perform the transformation from 8-bit image into the 1BT image. The smoothing technique can greatly reduce the scattering noise created in the 1BT image. This will help to improve the accuracy when performing the search operations. After the transformation, the 1BT image for the c frame and p frame is divided into number of macroblocks. The macroblock in the c frame will be first compared to the macroblock at the same position in the p frame. If the SAD is below the preprocessing threshold. (ThresholdP), the macroblock is considered to have negligible movement and search operation is not required. This preprocessing technique can greatly reduce the total number of search operations. Simulation results show that an improvement up to 0.65 dB, with reduction in search operation up to 95.07% is achieved. Overall, the proposed S + P technique is very suitable to be used in applications such as video conferencing and monitoring.