The OLAP (On-Line Analytical Processing) queries are ad hoc, complex aggregation queries on massive data set. How to effectively aggregate the query data becomes the key issue for OLAP query evaluation. To solve this problem, a novel grouping aggregation algorithm, DHEGA(Grouping Aggregation Based on the Dimension Hierarchical Encoding), is proposed in this paper. It utilizes the fairly short DHE(Dimension Hierarchical Encoding) and its hierarchical prefix path, retrieves the matching dimension hierarchical encoding and evaluates the set of query ranges for each dimension rapidly. As a result, our algorithm significantly reduces the disk I/Os and improves the efficiency of OLAP queries. The analytical and experimental results demonstrate that DHEGA algorithm is highly efficient and outperforms all the previous approaches.