For decomposition and integration of systems, one needs extensive knowledge of system structure. A design structure matrix (DSM) model provides a simple, compact, and visual representation of dependencies between system elements. By permuting the rows and columns of a DSM using a clustering algorithm, the underlying structure of a system can be revealed. In this paper, we present a new DSM clustering algorithm based upon Markov clustering, that is able to cope with the presence of “bus” elements, returns multilevel clusters, is capable of clustering weighted, directed, and undirected DSMs, and allows the user to control the cluster results by tuning only three input parameters. Comparison with two algorithms from the literature shows that the proposed algorithm provides clusterings of similar quality at the expense of less central processing unit (CPU) time.