The rapid development of the Internet in recent years has led to a vast increase in the numbers of Web services, which challenge users' capability to find their favorite services quickly and accurately. There is thus an urgent demand for service recommendations that help discover applicable services. Although the collaborative filtering technique is one of the most successful recommendation system technologies, it suffers from data sparsity and cold-start problems, which in turn lead to inaccurate results. In this article, we deal with these issues by applying a novel ontology-based clustering approach that uses domain specificity and service similarity for ontology generation. This clustering approach can easily and effectively increase the data density of the userservice dataset by assuming blank user preferences according to the history of user-favored domain(s). Then, user ratings are predicted by calculating the trust value between users. The experimental results indicate that the proposed approach can effectively alleviate the data sparsity and cold-start problems with lower prediction error with the best recommendation performance, and our method performed better than baseline approaches in terms of accuracy and novelty.