Complexity scalability offers the advantage of one-time design of video applications for a large product family, including mobile devices, without the need of redesigning the applications on the algorithmic level to meet the requirements of the different products. In this paper, we present complexity scalable MPEG encoding having core modules with modifications for scalability. The interdependencies of the scalable modules and the system performance are evaluated. Experimental results show scalability giving a smooth change in complexity and corresponding video quality. Scalability is basically achieved by varying the number of computed DCT coefficients and the number of evaluated motion vectors but other modules are designed such they scale with the previous parameters. In the experiments using the "Stefan" sequence, the elapsed execution time of the scalable encoder, reflecting the computational complexity, can be gradually reduced to roughly 50% of its original execution time. The video quality scales between 20 dB and 48 dB PSNR with unity quantizer setting, and between 21.5 dB and 38.5 dB PSNR for different sequences targeting 1500 kbps. The implemented encoder and the scalability techniques can be successfully applied in mobile systems based on MPEG video compression.