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The Minimum Dominating Set (MDS) problem is a classic NP-hard combinatorial optimization problem with many practical applications. Solving MDS is extremely challenging in computation. Previous work on exact algorithms mainly focuses on improving the theoretical time complexity and existing practical algorithms for MDS are almost based on heuristic search. In this paper, we propose a novel lower bound and an exact algorithm for MDS. The algorithm implements a branch-and-bound (BnB) approach and employs the new lower bound to reduce search space. Extensive empirical results show that the new lower bound is efficient in reduction of the search space and the new algorithm is effective for the standard instances and real-world instances. To the best of our knowledge, this is the first effective BnB algorithm for MDS.