I'm going to go out on a limb and say yes. The reason I say this is because when I'm watching SD netflix, my tv says it's getting a 720p signal. This should mean that the Atv is taking the 480 SD netflix signal and upconverting it to 720p. When watching the same SD video on my ps3 netflix, my tv says it is receiving a 480p signal. I could be all wrong about this so someone please correct me if I am wrong.