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Multitemporal synthetic aperture radar (SAR) images have been increasingly used in change detection studies. However, the presence of speckle is the main disadvantage of this type of data. To reduce speckle, many local adaptive filters have been developed. Although these filters are effective in reducing speckle in homogeneous areas, their use is often accompanied with the degradation of spatial details and fine structures. In this paper, we investigate a nonlocal means (NLM) denoising algorithm that combines local structures with a global averaging scheme in the context of change detection using multitemporal SAR images. First, the ratio image is logarithmically scaled to convert the multiplicative noise model to an additive model. A multidimensional change image is then constructed using image neighborhood feature vectors. Principle component analysis is then used to reduce the dimensionality of the neighborhood feature vectors. Recursive linear regression combined with fitting-accuracy assessment strategy is developed to determine the number of significant PC components to be retained for similarity weight computation. An intuitive method to estimate the unknown noise variance (necessary to run the NLM algorithm) based on the discarded PC components is also proposed. The efficiency of the method has been assessed using two different bitemporal SAR datasets acquired in Beijing and Shanghai, respectively. For comparison purposes, the algorithm is also tested against some of the most commonly used local adaptive filters. Qualitative and quantitative analyses of the algorithm have demonstrated the efficiency of the algorithm in recovering the noise-free change image while preserving the complex structures in urban areas.