Synthetic aperture radar (SAR) change detection provides a powerful tool for continuous, reliable, and objective observation of the Earth, supporting a wide range of applications that require regular monitoring and assessment of changes in the natural and built environment. In this paper, we introduce a novel SAR image change detection method based on principal component analysis and two-level clustering. First, two difference images of the log-ratio and mean-ratio operators are computed, then the principal component analysis fusion model is used to fuse the two difference images, and a new difference image is generated. To incorporate contextual information during the feature extraction phase, Gabor wavelets are used to obtain the representation of the difference image across multiple scales and orientations. The maximum magnitude across all orientations at each scale is then concatenated to form the Gabor feature vector. Following this, a cascading clustering algorithm is developed within this discriminative feature space by merging the first-level fuzzy c-means clustering with the second-level neighbor rule. Ultimately, the two-level combination of the changed and unchanged results produces the final change map. Five SAR datasets are used for the experiment, and the results show that our algorithm has significant advantages in SAR change detection.