Nowadays many data mining algorithms focus on clustering methods. There are also a lot of approaches designed for outlier detection. We observe that, in many situations, clusters and outliers are concepts whose meanings are inseparable to each other, especially for those data sets with noise. Thus, it is necessary to treat clusters and outliers as concepts of the same importance in data analysis. In this paper, we present a cluster-outlieriterative detection algorithm, tending to detect the clusters and outliers in another perspective for noisy data sets. In this algorithm, clusters are detected and adjusted according to the intra-relationship within clusters and the inter-relationship between clusters and outliers, and vice versa. The adjustment and modification of the clusters and outliers are performed iteratively until a certain termination condition is reached. This data processing algorithm can be applied in many fields such as pattern recognition, data clustering and signal processing.