We describe a new method for performing a nonlinear form of Principal Component Analysis. By the use of integral operator kernel functions, we can efficiently compute principal components in high--dimensional feature spaces, related to input space by some nonlinear map; for instance the space of all possible 5--pixel products in 16Θ16 images. We give the derivation of the method, along with a discussion of other techniques which can be made nonlinear with the kernel approach; and present first experimental results on nonlinear feature extraction for pattern recognition. AS and KRM are with GMD First (Forschungszentrum Informationstechnik), Rudower Chaussee 5, 12489 Berlin. AS and BS were supported by grants from the Studienstiftung des deutschen Volkes. BS thanks the GMD First for hospitality during two visits. AS and BS thank V. Vapnik for introducing them to kernel representations of dot products during joint work on Support Vector machines. This work profited from discussions w...