In this paper, a statistical clustering model and algorithm have been discussed. Finding the optimal solution to clustering problem is transformed into simulating the equilibrium state of a physical system., and then the equilibrium state of physical system is simulated by solving a series of problems to minimize the free energy which varies with temperature and attains the ground state of the system. Moreover, a great number of simulating examples make it clear that the clustering algorithm can be widely used, especially for the problem to which the traditional clustering algorithms are helpless. Key Words Clustering, Deterministic Annealing, Free Energy, The Principle ofMaximum Entropy