Aiming at the distributed hierarchical data grid model as tree data grid, an optimal replica placement algorithm is proposed in this paper, in which the number of replicas is k, which is specified by the user. The proposed algorithm consists of two phases. In phase 1,all nodes of binary tree are visited in reverse breadthfirst order, and based on whether a replica of object i is placed on a node or not, the total replication cost including both read and storage cost are calculated in a bottom up manner. In phase 2, based on a recursive process, the read cost and the storage cost calculated in phase 1 are used as input, and replicas are placed using top down procedure in order to minimize the total replication cost. Theoretical analysis and simulation results show that the optimal replica placement algorithm proposed in this paper not only has the lower time complexity, but also outperforms several typical replica placement algorithms at present in terms of the normalized placement cost, effective network usage and percentage of local access.