Cancer subtype information is critically important for understanding tumor heterogeneity. Existing methods to identify cancer subtypes have primarily focused on utilizing generic clustering algorithms (such as hierarchical clustering) to identify subtypes based on gene expression data. The network-level interaction among genes, which is key to understanding the molecular perturbations in cancer, has been rarely considered during the clustering process. The motivation of our work is to develop a method that effectively incorporates molecular interaction networks into the clustering process to improve cancer subtype identification.