In this paper, we introduced a novel Kernel-Reliability-based K-Means (KRKM) clustering algorithm for categorizing an unknown dataset under noisy condition. Compared with the conventional clustering algorithms, the proposed KRKM algorithm will measure both the reliability and the similarity for classifying data into its neighbor clusters by the dynamic kernel functions, where the noisy data will be rejected by being given low reliability. The reliability for classifying data is measured by a dynamic kernel function whose window size will be determined by the triangular relationship from this data to its two nearest clusters. The similarity from a data item to its neighbor clusters is measured by another adaptive kernel function which takes into account not only the similarity from data to clusters but also that between its two nearest clusters. The main contribution of this work lies in introducing the dynamic kernel functions to evaluate both the reliability and similarity for clustering, which makes the proposed algorithm more efficient in dealing with very strong noisy data. Through various experiments, the efficiency and effectiveness of proposed algorithm have been confirmed.