In this paper, we present a new soft-decision iterative decoding algorithm using an efficient minimum distance search (MDS) algorithm. The proposed MDS algorithm is a top-down and recursive MDS algorithm, which finds a most likely codeword among the codewords at the minimum distance of the code from a given codeword. A search is made in each divided section by a "call by need" from the upper section. As a consequence, the search space and computational complexity are reduced significantly. The simulation results show that the proposed decoding algorithm achieves near error performance to the maximum likelihood decoding for any RM code of length 128 and suboptimal for the (256, 37), (256, 93) and (256, 163) RM codes.