In this paper, we propose a compressed domain fire detection algorithm using macroblock types and Markov Model in H. 264 video. Compressed domain method does not require decoding to pixel domain, instead a syntax parser extracts syntax elements which are only available in compressed domain. Our method extracts only macroblock type and corresponding macroblock address information. Markov model with fire and non-fire models are evaluated using offlinetrained data. Our experiments show that the algorithm is able to detect and identify fire event in compressed domain successfully, despite a small chunk of data is used in the process.