In industrial practice, excessive alarms and high alarm rates are mostly generated from unreasonable settings to variable alarm thresholds, which have become the significant causes of impact on operation stability and plant safety. A correlation degree and clustering analysis-based approach was presented to optimize the variable alarm thresholds in this paper. The correlation degrees of variables are first obtained by analyzing correlation relationships among them. Second, the variables are grouped according to the gray correlation coefficients and clustering analysis, given the weight for fault alarm rate (FAR) in each group. An objective function about the FAR, missed alarm rate (MAR), and the maximum acceptable FAR and MAR is then established with variable weight. Eventually, based on an optimization algorithm, the objective function can be optimized for obtaining the optimal alarm threshold. Cases study of the Tennessee Eastman (TE) industrial simulation process and an actual industrial ethylene production process, in comparison to the initial situation, show that the method can effectively reduce FAR according to correlation degrees among variables in the system, and decrease the number of alarms with reduction rates of 40.5% and 35.3%, respectively.