Abstract: A reasoning algorithm of causality diagram with time delay is proposed to study the time delay in causality diagram.Firstly,some preliminary analyses and definitions of iterative reasoning of causality diagram are given.Thena a translation method of time delay,which preserves the strength value by using dummy node is given.Then,an iterative reasoning algorithm of TDCD is put forward,and its computational time complexity is analyzed.The iterative reasoning algorithm,which realizes reasoning only through matrix multiplication,is an effective approximating reasoning algorithm for its polynomial time complexity.Lastly,an example demonstrates the effect of the reasoning algorithm.The research shows that the iterative reasoning algorithm is so effective for dynamic reasoning while CD has time delay,its reasoning process is rigorous,and the result coincides with the reality.