We introduce clustering with overlapping neighborhood expansion (ClusterONE), a method for detecting potentially overlapping protein complexes from protein-protein interaction data. ClusterONE-derived complexes for several yeast data sets showed better correspondence with reference complexes in the Munich Information Center for Protein Sequence (MIPS) catalog and complexes derived from the Saccharomyces Genome Database (SGD) than the results of seven popular methods. The results also showed a high extent of functional homogeneity.