Wireless Sensor Network (WSN) is a network of sensor nodes that can sense the environment and send the information through wireless links to a sink. Wireless sensor nodes possess limited processing capability, storage and energy resources. The existence of sensor network depends on the life of sensor nodes i.e. ultimately on the energy consumption during its operation. Thus, in WSN, the efficient use of energy resources is very much necessary. Clustering is one of the approaches for energy saving in WSN. A cluster is a group of sensor nodes with one central entity named Cluster Head (CH). In this article, a new way of clustering for CH selection and cluster formation in WSNs is proposed; in which sensor network is divided into zones as per geographic locations of nodes. Clusters are formed within the zones by taking into account the residual energy of nodes and node distance. All cluster members send the sensed data to their respective CH. Hence, CH consumes more energy as it processes the collected data before forwarding it to Base Station (BS). Dropping of cluster head's residual energy below threshold value initiates cluster reformation. Performance analysis and simulation results are given with variations in number of nodes and transmission range. The obtained results show good performance of our algorithm in terms of reduced energy consumption, increased network lifetime and scalability of the network. © 2014 IEEE.