With the development of three-dimensional display and related technologies, depth video coding becomes a new topic and attracts great attention from industries and research institutes. Because (1) the depth video is not a sequence of images for final viewing by end users but an aid for rendering, and (2) depth video is simpler than the corresponding color video, fast algorithm for depth video is necessary and possible to reduce the computational burden of the encoder. This paper proposes a fast mode decision algorithm for depth video coding based on depth segmentation. Firstly, based on depth perception, the depth video is segmented into three regions: edge, foreground and background. Then, different mode candidates are searched to decide the encoding macroblock mode. Finally, encoding time, bit rate and video quality of virtual view of the proposed algorithm are tested. Experimental results show that the proposed algorithm save encoding time ranging from 82.49% to 93.21% with negligible quality degradation of rendered virtual view image and bit rate increment.