Prior service chaining systems address server and network load balancing issues individually, which may not ensure efficient system performance. To this end, in this paper, we study the design, implementation, complexity analysis, and evaluation of Nearest First and Local‐Global Transformation algorithm, which jointly supports server and network load balancing for chaining virtualized network functions (VNFs) in data center environment. The algorithm firstly constructs service chains by a greedy strategy, which both considers server and network latency. Then a searching technique, which replaces a selected VNF with another candidate and swaps the order of VNFs in service chains, is applied to improve the solutions. We have implemented the algorithm using Software‐defined networking and OpenFlow concepts. The numerical results indicate that, compared with a sequential approach, Nearest First and Local‐Global Transformation increases the system bandwidth utilization up to 45%. The results also show that it is worth applying the second phase of our algorithm since it considerably enhances the system performance by 20%.