Many applications require the management of spatial data in a multidimensio
nal feature space. Clustering large spatial databases is an important probl
em, which tries to find the densely populated regions in the feature space
to be used in data mining, knowledge discovery, or efficient information re
trieval. A good clustering approach should be efficient and detect clusters
of arbitrary shape. It must be insensitive to the noise (outliers) and the
order of input data. We propose WaveCluster, a novel clustering approach b
ased on wavelet transforms, which satisfies all the above requirements. Usi
ng the multiresolution property of wavelet transforms, we can effectively i
dentify arbitrarily shaped clusters at different degrees of detail. We also
demonstrate that WaveCluster is highly efficient in terms of time complexi
ty. Experimental results on very large datasets are presented, which show t
he efficiency and effectiveness of the proposed approach compared to the ot
her recent clustering methods.