Presently it is still challenge to develop, administrate and maintain large scale distributed e-business systems over heterogeneous open network environments. A flexible and intelligent dynamic agent institution framework is proposed to cope with the problems arising in this type of systems. Firstly a novel policy-driven service-augmented social agent architecture is designed, which serves as a basic autonomic unit participating in the services trading institution. Secondly a market facilitating dynamic agent institution is proposed, which serves as an e-business system framework. Thirdly some key techniques proposed to implement the dynamic agent institution are given. A proof of concept prototype e-business institution is presented.