Publication of trajectory data that contain rich information of vehicles in the dimensions of time and space (location) enables online monitoring and supervision of vehicles in motion and offline traffic analysis for various management tasks. However, it also provides security holes for privacy breaches as exposing individual’s privacy information to public may results in attacks threatening individual’s safety. Therefore, increased attention has been made recently on the privacy protection of trajectory data publishing. However, existing methods, such as generalization via anonymization and suppression via randomization, achieve protection by modifying the original trajectory to form a publishable trajectory, which results in significant data distortion and hence a low data utility. In this work, we propose a trajectory privacy-preserving method called dynamic anonymization with bounded distortion. In our method, individual trajectories in the original trajectory set are mixed in a localized manner to form synthetic trajectory data set with a bounded distortion for publishing, which can protect the privacy of location information associated with individuals in the trajectory data set and ensure a guaranteed utility of the published data both individually and collectively. Through experiments conducted on real trajectory data of Guangzhou City Taxi statistics, we evaluate the performance of our proposed method and compare it with the existing mainstream methods in terms of privacy preservation against attacks and trajectory data utilization. The results show that our proposed method achieves better performance on data utilization than the existing methods using globally static anonymization, without trading off the data security against attacks.