In recent years, different metaheuristic methods have been used to solve clustering problems. This paper addresses the problem of manufacturing cell formation using a modified particle swarm optimization (PSO) algorithm. The main modification that this work made to the original PSO algorithm consists in not using the vector of velocities that the standard PSO algorithm does. The proposed algorithm uses the concept of proportional likelihood with modifications, a technique that is used in data mining applications. Some simulation results are presented and compared with results from literature. The criterion used to group the machines into cells is based on the minimization of intercell movements. The computational results show that the PSO algorithm is able to find the optimal solutions in almost all instances, and its use in machine grouping problems is feasible.