This study presents a novel kernel discriminant transformation (KDT) algorithm for face recognition based on image sets. As each image set is represented by a kernel subspace, we formulate a KDT matrix that maximizes the similarities of within-kernel subspaces, and simultaneously minimizes those of between-kernel subspaces. Although the KDT matrix cannot be computed explicitly in a high-dimensional feature space, we propose an iterative kernel discriminant transformation algorithm to solve the matrix in an implicit way. Another perspective of similarity measure, namely canonical difference, is also addressed for matching each pair of the kernel subspaces, and employed to simplify the formulation. The proposed face recognition system is demonstrated to outperform existing still-image-based as well as image set-based face recognition methods using the Yale Face database B, Labeled Faces in the Wild and a self-compiled database.