Background subtraction (BGS) is one of the impor-tant steps in many automatic video analysis applications. Several researchers have attempted to address the challenges due to illumination variation, shadow, camouflage, dynamic changes in the background and bootstrapping requirement. In this paper, a method to perform BGS using dynamic clustering is proposed. A background model is generated using the K-means algorithm. The normalized γ corrected distance values and an automatic threshold value is used to perform the background subtraction. The background models are updated online to handle slow illu-mination changes. The experiment was conducted on CDNet2014 dataset. The experimental results show that the proposed method is fast and performs well for baseline, camera-jitter and dynamic background categories of video.