Context-based Adaptive Variable Length Coding (CAVLC) as a new entropy coding algorithm has been introduced into H.264/AVC standard. Through analysing the CAVLC coding algorithm detailedly, the paper proposes an overlapping coverage storage method and a new stream merger method, and gives the specific implementation. This idea improves the structure and performance of the complex module and reduces the implementation complexity. The experimental results show that the proposed entropy encoder is correct, and the highest coding frequency of 81.70MHz can be achieved. Meanwhile all the hardware resource consumption is less than 2% of total hardware resources. The new entropy encoder achieves a better balance in system performance and resource consumption.