Video streaming over wireless networks faces challenges of time-varying packet loss rate and fluctuating bandwidth. In this paper, we focus on streaming precoded video that is both source and channel coded. Dynamic rate shaping has been proposed to “shape” the precompressed video to adapt to the fluctuating bandwidth. In our earlier work, rate shaping was extended to shape the channel coded precompressed video, and to take into account the time-varying packet loss rate as well as the fluctuating bandwidth of the wireless networks. However, prior work on rate shaping can only adjust the rate oarsely. In this paper, we propose “fine-grained rate shaping (FGRS)” to allow for bandwidth adaptation over a wide range of bandwidth and packet loss rate in fine granularities. The video is precoded with fine granularity scalability (FGS) followed by channel coding. Utilizing the fine granularity property of FGS and channel coding, FGRS selectively drops part of the precoded video and still yields decodable bit-stream at the decoder. Moreover, FGRS optimizes video streaming rather than achieves heuristic objectives as conventional methods. A two-stage rate-distortion (RD) optimization algorithm is proposed for FGRS. Promising results of FGRS are shown.