Finding useful patterns in large datasets has attracted considerable interest recently, and one of the most widely st,udied problems in this area is the identification of clusters, or deusel y populated regions, in a multi-dir nensional clataset. Prior work does not adequately address the problem of large datasets and minimization of 1/0 costs. This paper presents a data clustering method named Bfll (;”H (Balanced Iterative Reducing and Clustering using Hierarchies), and demonstrates that it is especially suitable for very large databases. BIRCH incrementally and clynamicall y clusters incoming multi-dimensional metric data points to try to produce the best quality clustering with the available resources (i. e., available memory and time constraints). BIRCH can typically find a goocl clustering with a single scan of the data, and improve the quality further with a few aclditioual scans. BIRCH is also the first clustering algorithm proposerl in the database area to handle “noise) ’ (data points that are not part of the underlying pattern) effectively. We evaluate BIRCH’S time/space efficiency, data input order sensitivity, and clustering quality through several experiments. We also present a performance comparisons of BIR (;’H versus CLARA NS, a clustering method proposed recently for large datasets, and S11OW that BIRCH is consistently 1