Abstract. Clustering is a widely used approach to ease implementation of various problems such as routing and resource management in mobile ad hoc networks (MANET)s. We propose a new fully distributed algorithm for clustering in MANETs that merges clusters to form higher level clusters by increasing their levels. We show the operation of the algorithm and analyze its time and message complexities and provide results in the simulation environment of ns2. Our results conform that the algorithm proposed is scalable and has a lower time and message complexities than the other algorithms.