©2019 IEEE. Personal use of this material is permitted. Permission from IEEE must be obtained for all other uses, in any current or future media, including reprinting/republishing this material for advertising or promotional purposes, creating new collective works, for resale or redistribution to servers or lists, or reuse of any copyrighted component of this work in other works. This paper presents a network clustering (NC) method for active distribution networks (ADNs). Following the outage of a section of an ADN, the method identifies and forms an optimum cluster of microgrids within the section. The optimum cluster is determined from a set of candidate microgrid clusters by estimating the following metrics: total power loss, voltage deviations, and minimum load shedding. To compute these metrics, equivalent circuits of the clusters are estimated using measured data provided by phasor measurement units (PMUs). Hence, the proposed NC method determines the optimum microgrid cluster without requiring information about the network’s topology and its components. The proposed method is tested by simulating a study network in a real-time simulator coupled to physical PMUs and a prototype algorithm implementation, also executing in real time. Peer Reviewed