We present a distributed algorithm for the clustering of peers in a Networked Virtual Environment (NVE) that are organized using a peer-to-peer (P2P) network based on the Delaunay triangulation. The algorithm is dynamic in the sense that whenever a peer joins or leaves the NVE, the clustering will be adapted if necessary by either splitting a cluster or merging clusters. The main idea of the algorithm is to classify links between adjacent peers into short intra-cluster and long inter-cluster links. The advantages of clustering are multiple: clustering allows to limit queries to the peers of a cluster avoiding to flood the entire network. Since clusters can be seen as a level of abstraction that reduces the amount of information/detail exposed about the NVE, clustering allows for faster navigation in the NVE and reduces the number of messages a node receives when he travels through the NVE.