Distributed virtual environment (DVE) systems model and simulate the activities of thousands of entities interacting in a virtual world over a wide area network. These systems are composed of many servers each of which is responsible to manage multiple clients who want to participate in the virtual world .each server delivers the information updated from different clients, to other client in virtual world .Lui & Chan proposed a three step algorithm for balancing the workload among the servers of the DVE, However they didn't take into consideration objects affecting the calculation. This paper presents an object driven partitioning algorithm to improve the performance of distributed virtual environment.