Security has become a prime concern in providing communication between mobile nodes in a hostile environment. Unlike wired networks, the unique characteristics of Mobile Ad Hoc Networks (MANETs) pose a number of non-trivial challenges to security design. This paper presents a threshold security mechanism with a mobility based D-hop (MobDHop) clustering algorithm. A new metric has been introduced to measure the variation of distance between nodes over time in order to estimate the relative mobility of two nodes. Nodes that have similar moving pattern are grouped into a cluster. Unlike other clustering algorithms, the diameter of clusters is not restricted to two hops. Instead, the diameters of clusters are flexible and determined by the stability of clusters. The stability of clusters is estimated based on relative mobility of cluster members. A threshold cryptographic scheme is employed to protect routing information and data traffic. To ensure distributed trust in the clustered environment, the private key (k) is divided into n pieces in such a way that k is easily reconstruct able from any p number of pieces. Even complete knowledge of (p-1) pieces reveals absolutely no information about k.