The paper presents a significantly fast INTRA mode and direction prediction algorithm for MPEG-2 to H.264/AVC time sensitive transcoders for mobile applications. The mode and direction prediction in H.264/AVC encoder is responsible for a huge portion of the delay in the transcoder. An efficient transcoder would take advantage of the information stored in MPEG-2 bitstream (i.e. DCT coefficients) to simplify the IN-TRA prediction in H.264/AVC. Based on the spatial activity analysis using a smoothness determining factor and an edge orientation detector, an early mode decision technique and an INTRA direction prediction for each mode are proposed. The proposed algorithm utilizes the DCT coefficients of the MPEG-2 to eliminate redundant operations in the H.264/AVC encoder part of the transcoder. The Experimental results; using frames with different resolution; show 92% transcoding time elimination at slight PSNR degradation (less than 3.5%) compared with the conventional transcoder.