The compression of medical image series is very important in telemedicine. The motion estimation plays a key role in the video sequence compression. In this paper, an improved square-diamond search (SDS) algorithm is proposed for the motion estimation of medical image series. The improved SDS algorithm reduces the number of the searched points. This improved SDS algorithm is used in wavelet transformation field to estimate the motion of medical image series. A simulation experiment for digital subtraction angiography (DSA) is made. The experiment results show that the algorithm accuracy is higher than that of other algorithms in the motion estimation of medical image series.