Radiation dose from CT scans is an increasing health concern in the practice of radiology. Higher dose scans can produce clearer images with high diagnostic quality, but may increase the potential risk of radiation-induced cancer or other side effects. Lowering radiation dose alone generally produces a noisier image and may degrade diagnostic performance. Recently, CT dose reduction based on non-local means (NLM) filtering for noise reduction has yielded promising results. However, traditional NLM denoising operates under the assumption that image noise is spatially uniform noise, while in CT images the noise level varies significantly within and across slices. Therefore, applying NLM filtering to CT data using a global filtering strength cannot achieve optimal denoising performance. In this work, we have developed a technique for efficiently estimating the local noise level for CT images, and have modified the NLM algorithm to adapt to local variations in noise level. The local noise level estimation technique matches the true noise distribution determined from multiple repetitive scans of a phantom object very well. The modified NLM algorithm provides more effective denoising of CT data throughout a volume, and may allow significant lowering of radiation dose. Both the noise map calculation and the adaptive NLM filtering can be performed in times that allow integration with the clinical workflow.