A method for compressing video signals based on adaptive compression rate and a circuit system thereof are provided. In the method, a digital signal processor is used to process a video so as to frame-by-frame obtain statistical data, for example, a maximum of compressed data. The maximum of compressed data of a previous frame is used to determine a compression state of a current frame. The compression state of the frame allows the processor to decide a direction to adjust a compression ratio. Next, statistical data of the previous frame is used to decide a stride to adjust the compression ratio. The statistical data can be a maximum of compressed data and a quantization table scale referred to rendering a prediction curve that allows the processor to determine the stride. A compression ratio is then determined according to the direction and the stride of adjustment.