As various kinds of data traffic are integrated into IP traffic, the role of public networks is shifting to provide huge IP packet transmission service. Enterprise users will require the capability to manage end-to-end network services in line with the enterprise business goal, e.g. protecting confidential information flow and prioritizing mission critical data flow. The management system of public IP network should support this capability. In this paper, we propose a policy-based networking service over heterogeneous public IP networks called "DynaServ" which provides dynamic, fine-grained IP network service customization for enterprise users. The public network is managed based on the Telecommunications Management Networks (TMN) four layer management framework which consists of business, service, network and element management, to accommodate huge topologically and technologically heterogeneous networks and to provide network services based on the Service Level Agreement (SLA). To implement "DynaServ", we propose a network management architecture with these public IP network specific characteristics in mind. Because the public network is managed based on distributed and decentralized principles, we introduce a management policy technology which matches this. The dynamic customization of the IP service is invoked based on an event from the network element (e.g. a state change notification) or from the network/service management function (e.g. network/service fault alarm). Different type policy rules, therefore, reside in each management layer. To handle those kind of policy rules efficiently, we introduce a multi layer policy-based management architecture, which includes a policy transformation function for mapping a customer policy to service, network and element management policy rules considering the SLA and network management information. In this paper, we also describe an example of a "DynaServ" application for interworking between the private network management system and the public network management system.