<FONT face=Verdana>A novel reputation evaluation algorithm for service grid nodes is proposed

which computes the transitive trust between entities by performing a modified Dijkstra algorithm on a directional weighted overlay graph consists of grid entities and their direct trust values

and predicts the evaluation of reputation between entities by taking account of the inter-organization trust relationship

direct and transitive trust together. Besides

the proposed algorithm considers the VO (virtual organization) perspective idea of VO initiator and takes services or resources the target VO required as one of the most important fine-granularity evaluation criterion

which makes the algorithm more suitable for constructing VO in a category of service grid environment which includes autonomic organizations. Simulation experiment results show that our algorithm restrains the bad performers and resists against fake transaction attack and slander attack efficiently. It provides a clear advantage in the design of a VO infrastructure.