Next generation sequencing has made it possible to perform differential gene expression studies in non-model organisms. For these studies, the need for a reference genome is circumvented by performing de novo assembly on the RNA-seq data. However, transcriptome assembly produces a multitude of contigs, which must be clustered into genes prior to differential gene expression detection. Here we present Corset, a method that hierarchically clusters contigs using shared reads and expression, then summarizes read counts to clusters, ready for statistical testing. Using a range of metrics, we demonstrate that Corset out-performs alternative methods. Corset is available from https://code.google.com/p/corset-project/.