In many situations, it is very important to identify a certain unkown system, it from its input-output data. For this purpose, several system modeling algorithms have been suggested heretofore, and studies regarding the fuzzy modeling based on its nonlinearity get underway as well. Generatlly, fuzzy models have the capability of dividing input space into several subspaces, compared to linear ones. But hitherto subggested fuzzy modeling algorithms do not take into consideration the correlations between components of sample input data and address them independently of each other, which results in ineffective partition of input space. Therefore, to solve this problem, this letter proposes a new fuzzy modeling algorithm which partitions the input space more efficiently that conventional methods by taking into consideration correlations between components of sample data. As a way to use correlation and divide the input space, the method of principal component is ued. Finally, the results of computer simulation are given to demonstrate the validity of this algorithm.