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Large remote sensing datasets, that either cover large areas or have high spatial resolution, are often a burden of information mining for scientific studies. Here, we present an approach that conducts clustering after gray-level vector reduction. In this manner, the speed of clustering can be considerably improved. The approach features applying eigenspace transformation to the dataset followed by compressing the data in the eigenspace and storing them in coded matrices and vectors. The clustering process takes the advantage of the reduced size of the compressed data and thus reduces computational complexity. We name this approach Clustering Based on Eigen-space Transformation (CBEST). In our experiment with a subscene of Landsat Thematic Mapper (TM) imagery, CBEST was found to be able to improve speed considerably over conventional K-means as the volume of data to be clustered increases. We assessed information loss and several other factors. In addition, we evaluated the effectiveness of CBEST in mapping land cover/use with the same image that was acquired over Guangzhou City, South China and an AVIRIS hyperspectral image over Cappocanoe County, Indiana. Using reference data we assessed the accuracies for both CBEST and conventional K-means and we found that the CBEST was not negatively affected by information loss during compression in practice. We discussed potential applications of the fast clustering algorithm in dealing with large datasets in remote sensing studies.