In H.264 standard, multiple reference frame motion estimation (MRF-ME) can help to generate small residues and improve the performance. However, MRF-ME is also a computation intensive task for video coding system. Many software oriented fast algorithms have been proposed to shorten MRF-ME process. For hardwired real-time encoder, the division of ME part into two pipeline stages degrades the efficiency of many fast algorithms. This paper gives one hardware friendly MRF-ME algorithm to reduce computation complexity in MRF-ME procedure. The proposed algorithm is based on the analysis of macroblock's (MB's) feature and restricts search range for static background MB. Through experiment results, with negligible video quality degradation, the proposed background analysis based MRF-ME algorithm can averagely reduce 41.75% ME time for sequences with static background. Moreover, the proposed algorithm is compatible to other fast algorithms and friendly to hardware implementation of H.264 real-time encoder.