Recently, lip image analysis has received much attention because its visual information is shown to provide improvement for speech recognition and speaker authentication. Lip image segmentation plays an important role in lip image analysis. In this paper, a new fuzzy clustering method for lip image segmentation is presented. This clustering method takes both the color information and the spatial distance into account while most of the current clustering methods only deal with the former. In this method, a new dissimilarity measure, which integrates the color dissimilarity and the spatial distance in terms of an elliptic shape function, is introduced. Because of the presence of the elliptic shape function, the new measure is able to differentiate the pixels having similar color information but located in different regions. A new iterative algorithm for the determination of the membership and centroid for each class is derived, which is shown to provide good differentiation between the lip region and the nonlip region. Experimental results show that the new algorithm yields better membership distribution and lip shape than the standard fuzzy c-means algorithm and four other methods investigated in the paper.