Dynamic routing and wavelength assignment in the WDM networks with.both dynamic service traffic and limited-range wavelength conversion have been discussed. According to probability and limitation of wavelength conversion, a novel heuristic algorithm, which could achieve dynamic minimum cost routing and optimal virtual wavelength path, DMC - OVWP, is proposed based on Moone-Dijkstra algorithm. With separation and combination of routing and wavelength assignment subproblems, the algorithm optimizes RWA problem. The results simulating CERNET using the algorithm show that low blocking probability has been obtained.