Location-based services (LBS) are widely used due to the rapid development of mobile devices and location technology. Users usually provide precise location information to LBS to access the corresponding services. However, this convenience comes with the risk of location privacy disclosure, which can infringe upon personal privacy and security. In this paper, a location privacy protection method based on differential privacy is proposed, which efficiently protects users’ locations, without degrading the performance of LBS. First, a location-clustering (L-clustering) algorithm is proposed to divide the continuous locations into different clusters based on the distance and density relationships among multiple groups. Then, a differential privacy-based location privacy protection algorithm (DPLPA) is proposed to protect users’ location privacy, where Laplace noise is added to the resident points and centroids within the cluster. The experimental results show that the DPLPA achieves a high level of data utility, with minimal time consumption, while effectively protecting the privacy of location information.