In a moving picture encoding apparatus 10, as an embodiment of the present invention, a predicted image generator 16 generates a predicted image with respect to a target image, using a reference image stored in a frame memory 20. A difference image generator 18 performs a difference operation between the target image and the predicted image to generate a difference image. An encoder 22 encodes the difference image to generate an encoded difference signal. A decoder 28 decodes the encoded difference signal to generate a decoded difference image. A reproduced image generator 30 performs a summation of the decoded difference image and the predicted image to generate a reproduced image. An image updater 32 performs a weighted summation of a first image which is one of the reproduced image and the reference image, and a second image which is the other of the reproduced image and the reference image, to generate an updated image. The updated image is stored into the frame memory 20 to be used as a reference image in encoding of another target image.