Abstract: In this paper a secure two-party bargaining protocol is proposed which is based on Pallier homomorphic public key cryptosystem. The participant can make a bargain with another one by implementing the protocol. During the protocol, the privacy of input and the correctness of output should be preserved. The third party will participate in working out the final price only under the condition of success agreement. Through the analysis of complexity and security, this protocol holds higher implementing efficiency and security characters, and therefore has application value in the e-commerce.