System and method embodiments are provided for traffic behavior driven dynamic zoning for distributed traffic engineering (TE) in software defined networking (SDN). In an embodiment, a method in a network component for dynamic zoning for TE in SDN includes receiving at the network component network information from at least one SDN controller from a plurality of SDN controllers in a network; determining with the network component a plurality of TE zones for the network, selecting a local zone TE controller for each of the plurality of TE zones, and selecting a master TE controller according to the network information and a zoning scheme, wherein the local zone TE controller and the master TE controller are selected form one of the SDN controllers; and transmitting with the network component an indication of the local zone TE controllers, zone membership, and the master controllers to at least some of the SDN controllers.