We propose Distributed Neighbor Expansion (Distributed NE), a parallel and distributed graph partitioning method that can scale to trillion-edge graphs while providing high partitioning quality. Distributed NE is based on a new heuristic, called parallel expansion, where each partition is constructed in parallel by greedily expanding its edge set from a single vertex in such a way that the increase of the vertex cuts becomes local minimal. We theoretically prove that the proposed method has the upper bound in the partitioning quality. The empirical evaluation with various graphs shows that the proposed method produces higher-quality partitions than the state-of-the-art distributed graph partitioning algorithms. The performance evaluation shows that the space efficiency of the proposed method is an order-of-magnitude better than the existing algorithms, keeping its time efficiency comparable. As a result, Distributed NE can partition a trillion-edge graph using only 256 machines within 70 minutes.