Compared with the small overhead of data payload in sensor network, the overhead of MAC address is significant from the point of view of energy-saving. A distributed algorithm (Virtual Grid Spatial Reusing- VGSR) for MAC address assignment is presented in this papel; which is a low energy cost algorithm and reduces the size of the fixed MAC address greatly based on the mapping of geographical position. Moreover; VGSR algorithm scales well with the network size and achieves the optimum performance by adjusting the communication range of sensor nodes. In typical scenarios, the MAC address size is 5 bits and the corresponding average size is only 3.86 bits, which outperforms other existing approaches.