Color image quantization is a process of representing an image with a small number of well selected colors. In this article an algorithm for multidimensional data clustering (termed the variance-based algorithm), based on the criterion of minimization of the sum-of-squared error, is applied to the problem of reducing the number of colors used to represent a given color image. The suitability of the sum-of-squared error criterion for measuring the similarity between the original and quantized images is examined using a digitized image and a computer-generated image. The experimental results indicate that this error measure is basically consistent with the perceived quality of the quantized image. The performance of the variance-based algorithm is compared with that of other algorithms for color image quantization in terms of quantization images generated using the colors selected by the variance-based and the mediancut algorithms are also presented.