In this paper, we propose a Dynamic Naive Bayesian (DNB) network model for classifying data sets with hierarchical labels. The DNB model is built upon a Naive Bayesian (NB) network, a successful classifier for data with flattened (nonhierarchical) class labels. The problems using flattened class labels for hierarchical classification are addressed in this paper. The DNB has a top-down structure with each level of the class hierarchy modeled as a random variable. We defined augmenting operations to transform class hierarchy into a form that satisfies the probability law. We present algorithms for efficient learning and inference with the DNB model. The learning algorithm can be used to estimate the parameters of the network. The inference algorithm is designed to find the optimal classification path in the class hierarchy. The methods are tested on yeast gene expression data sets, and the classification accuracy with DNB classifier is significantly higher than it is with previous approaches- flattened classification using NB classifier.