Abstract: The dynamic and heterogeneous characteristics of distributed virtualized environment can lead to the failure or error of the service composition running in the distributed virtualized environment. It can result in the disruption of the entire business process, which greatly affects the dependability of the whole software system. As the most commonly used method to cope with the service failure, the existing service substitution methods can cause that the consistency and correctness of the service composition after the substitution is destroyed due to the lack of transaction support. In this paper, we propose a service substitution method in distributed virtualized environment based on transaction compensation. The method we proposed is based on the service composition transactional attributes. Firstly, a hierarchical service composition model which supports transaction attributes is proposed. Then the scope of the service transaction is identified according to the service data dependencies. Finally, based on transaction scope identification and service compensation mechanism, we propose a service failure processing method to promote the dependability of the service composition enhanced evolution. The experimental results show that the proposed method can ensure the atomic and data consistency of the transaction in service composition, and has good scalability that can achieve good service substitution.