Computer aided process planning (CAPP) is an important bridge between computer aided design (CAD) and computer aided manufacturing (CAM) in computer integrated manufacturing environment. Operation sequence generation is one of the most difficult tasks in CAPP. The aim of operation sequencing in CAPP is to determine the best order of machining operations with minimal manufacturing cost while satisfying all the precedence constraints. This paper presents a proposed method for optimizing operation sequence using modified clustering algorithm. The key concept of method is that the precedence constraints are firstly checked for selecting all possible next operations of the last operation in the sequence and their traveling costs are compared to choose the optimal feasible operation which has the minimum traveling cost in the sequence. Then, all operation sequences are calculated the total traveling cost for obtaining the optimal sequence result. Because of removing all unfeasible sequences at the beginning of procedure and selecting the optimal operation into sequence in each step, the time can be significantly reduced. The capability and performance of the proposed method are demonstrated in three specific case studies. The comparisons show that the proposed method can solve the problem in much lesser computational time while generating more alternate optimal feasible sequences than previous algorithms.