diff --git a/homeassistant/components/camera/amcrest.py b/homeassistant/components/camera/amcrest.py
index 72d3120c77a..8f8b7e5f9f5 100644
--- a/homeassistant/components/camera/amcrest.py
+++ b/homeassistant/components/camera/amcrest.py
@@ -12,18 +12,22 @@ import voluptuous as vol
 
 import homeassistant.loader as loader
 from homeassistant.components.camera import (Camera, PLATFORM_SCHEMA)
+from homeassistant.components.ffmpeg import DATA_FFMPEG
 from homeassistant.const import (
     CONF_HOST, CONF_NAME, CONF_USERNAME, CONF_PASSWORD, CONF_PORT)
 from homeassistant.helpers import config_validation as cv
 from homeassistant.helpers.aiohttp_client import (
-    async_get_clientsession, async_aiohttp_proxy_web)
+    async_get_clientsession, async_aiohttp_proxy_web,
+    async_aiohttp_proxy_stream)
 
-REQUIREMENTS = ['amcrest==1.1.9']
+REQUIREMENTS = ['amcrest==1.2.0']
+DEPENDENCIES = ['ffmpeg']
 
 _LOGGER = logging.getLogger(__name__)
 
 CONF_RESOLUTION = 'resolution'
 CONF_STREAM_SOURCE = 'stream_source'
+CONF_FFMPEG_ARGUMENTS = 'ffmpeg_arguments'
 
 DEFAULT_NAME = 'Amcrest Camera'
 DEFAULT_PORT = 80
@@ -40,7 +44,8 @@ RESOLUTION_LIST = {
 
 STREAM_SOURCE_LIST = {
     'mjpeg': 0,
-    'snapshot': 1
+    'snapshot': 1,
+    'rtsp': 2,
 }
 
 CONTENT_TYPE_HEADER = 'Content-Type'
@@ -56,6 +61,7 @@ PLATFORM_SCHEMA = PLATFORM_SCHEMA.extend({
     vol.Optional(CONF_PORT, default=DEFAULT_PORT): cv.port,
     vol.Optional(CONF_STREAM_SOURCE, default=DEFAULT_STREAM_SOURCE):
         vol.All(vol.In(STREAM_SOURCE_LIST)),
+    vol.Optional(CONF_FFMPEG_ARGUMENTS): cv.string,
 })
 
 
@@ -92,8 +98,9 @@ class AmcrestCam(Camera):
         super(AmcrestCam, self).__init__()
         self._camera = camera
         self._base_url = self._camera.get_base_url()
-        self._hass = hass
         self._name = device_info.get(CONF_NAME)
+        self._ffmpeg = hass.data[DATA_FFMPEG]
+        self._ffmpeg_arguments = device_info.get(CONF_FFMPEG_ARGUMENTS)
         self._resolution = RESOLUTION_LIST[device_info.get(CONF_RESOLUTION)]
         self._stream_source = STREAM_SOURCE_LIST[
             device_info.get(CONF_STREAM_SOURCE)
@@ -117,15 +124,28 @@ class AmcrestCam(Camera):
             yield from super().handle_async_mjpeg_stream(request)
             return
 
-        # Otherwise, stream an MJPEG image stream directly from the camera
-        websession = async_get_clientsession(self.hass)
-        streaming_url = '{0}mjpg/video.cgi?channel=0&subtype={1}'.format(
-            self._base_url, self._resolution)
+        elif self._stream_source == STREAM_SOURCE_LIST['mjpeg']:
+            # stream an MJPEG image stream directly from the camera
+            websession = async_get_clientsession(self.hass)
+            streaming_url = self._camera.mjpeg_url(typeno=self._resolution)
+            stream_coro = websession.get(
+                streaming_url, auth=self._token, timeout=TIMEOUT)
 
-        stream_coro = websession.get(
-            streaming_url, auth=self._token, timeout=TIMEOUT)
+            yield from async_aiohttp_proxy_web(self.hass, request, stream_coro)
 
-        yield from async_aiohttp_proxy_web(self.hass, request, stream_coro)
+        else:
+            # streaming via fmpeg
+            from haffmpeg import CameraMjpeg
+
+            streaming_url = self._camera.rtsp_url(typeno=self._resolution)
+            stream = CameraMjpeg(self._ffmpeg.binary, loop=self.hass.loop)
+            yield from stream.open_camera(
+                streaming_url, extra_cmd=self._ffmpeg_arguments)
+
+            yield from async_aiohttp_proxy_stream(
+                self.hass, request, stream,
+                'multipart/x-mixed-replace;boundary=ffserver')
+            yield from stream.close()
 
     @property
     def name(self):
diff --git a/homeassistant/components/sensor/amcrest.py b/homeassistant/components/sensor/amcrest.py
index 40556fbe5ad..23f7fc4dfbe 100644
--- a/homeassistant/components/sensor/amcrest.py
+++ b/homeassistant/components/sensor/amcrest.py
@@ -19,7 +19,7 @@ import homeassistant.loader as loader
 
 from requests.exceptions import HTTPError, ConnectTimeout
 
-REQUIREMENTS = ['amcrest==1.1.9']
+REQUIREMENTS = ['amcrest==1.2.0']
 
 _LOGGER = logging.getLogger(__name__)
 
diff --git a/requirements_all.txt b/requirements_all.txt
index a859a526305..c8f8c5aafd9 100644
--- a/requirements_all.txt
+++ b/requirements_all.txt
@@ -56,7 +56,7 @@ alarmdecoder==0.12.1.0
 
 # homeassistant.components.camera.amcrest
 # homeassistant.components.sensor.amcrest
-amcrest==1.1.9
+amcrest==1.2.0
 
 # homeassistant.components.media_player.anthemav
 anthemav==1.1.8