We got user data in xml corresponding to 10000 users and data size of each user is 2-3KB. So total data size will be more than 20MB but client wants to receive data not more than 64KB at a time.

So we need to split up xml file into chunks of 64KB without disturbing its structure and send it to client using TN.

NodeIterator is one option to split into chunks but is there any other method to use TN with xml chunks?

You are on the right track with NodeIterator option,Also you can configure TN LargeDocument handling mechanism and process it.

HTH,
RMg