Phylogenetic analysis of protein sequences provides a powerful means of identifying novel protein functions and subfamilies, and for identifying and resolving annotation errors. However, automation of functional clustering based on phylogenetic trees has been challenging, and most of it is done manually. Clustering phylogenetic trees usually requires the delineation of tree-based thresholds (e.g., distances), leading to an ad hoc problem. We propose a new phylogenetic clustering approach that identifies clusters without using ad hoc distances or other pre-defined values. Our workflow combines uniform manifold approximation and projection (UMAP) with Gaussian mixture models as a k-means like procedure to automatically group sequences into clusters. We then apply a “second pass” clade identification algorithm to resolve non-monophyletic groups. We tested our approach with several well-curated protein families (outer membrane porins, acyltransferase, and dehydrogenases) and showed our automated methods recapitulated known subfamilies. We also applied our methods to a broad range of different protein families from multiple databases, including Pfam, PANTHER, and UNIPROT. Our results showed that AutoPhy rapidly generated monophyletic clusters (subfamilies) within phylogenetic trees evolving at very different rates both within and among phylogenies. The phylogenetic clusters generated by AutoPhy resolved misannotations, determined new protein functional groups, and detected novel viral strains.