This paper examines the problems of database partitioning and file allocation in a fixed topology distributed computer network. The design objective is to make files as collections of attributes and to allocate these files to network nodes so that a minimum total transmission cost is achieved subject to storage capacity constraints. A mathematical model for solving the problem is formulated and, the resulting optimization problem is shown to fall in a class of NP-complete problems. A new heuristic algorithm is developed which uses the idea of allocating attributes according to the transaction requirements at each computer node and then making files using the allocated attributes. Numerical results indicate that the heuristic algorithm yields practicable low cost solutions in comparison with the existing methods which deal with the file allocation problems and database partitioning problems independently.