Clustering image pixels is an important image segmentation technique. While a large amount of clustering algorithms have been published and some of them generate impressive clustering results, their performance often depends heavily on user-specified parameters. This may be a problem in the practical tasks of data clustering and image segmentation. In order to remove the dependence of clustering results on user-specified parameters, we investigate the characteristics of existing clustering algorithms and present a parameter-free algorithm based on the DSets (dominant sets) and DBSCAN (Density-Based Spatial Clustering of Applications with Noise) algorithms. First, we apply histogram equalization to the pairwise similarity matrix of input data and make DSets clustering results independent of user-specified parameters. Then, we extend the clusters from DSets with DBSCAN, where the input parameters are determined based on the clusters from DSets automatically. By merging the merits of DSets and DBSCAN, our algorithm is able to generate the clusters of arbitrary shapes without any parameter input. In both the data clustering and image segmentation experiments, our parameter-free algorithm performs better than or comparably with other algorithms with careful parameter tuning.