The virtual enterprise (VE), which is formed according to some business opportunities through the collaboration of supply chain partners, is an effective way of business operation in the dynamic global market. This paper proposes an automated negotiation protocol for multi-agent system (MAS) based virtual enterprises. Firstly, to facilitate the functional integration of VEs, a MAS framework is developed to represent the whole life cycle of VEs. Secondly, a negotiation protocol supporting agent argumentation and ontology interoperability between agents is designed to handle the one-to-many negotiation scenarios in the VE context. The negotiation ontology is defined to combine the negotiation domain knowledge. Meanwhile, the ontology interoperability and agent argumentation mechanism is illustrated to ensure agents’ mutual understandings. Finally, the proposed MAS framework is implemented upon the JADE platform. Simulation experiments are carried out to verify the agent interaction sequences in the negotiation protocol.