We introduce the Gaussian transform (GT), an optimal transport inspired iterative method for denoising and enhancing latent structures in datasets. Under the hood, GT generates a new distance function (GT distance) on a given dataset by computing the $\ell^2$-Wasserstein distance between certain Gaussian density estimates obtained by localizing the dataset to individual points. Our contribution is twofold: (1) theoretically, we establish firstly that GT is stable under perturbations and secondly that in the continuous case, each point possesses an asymptotically ellipsoidal neighborhood with respect to the GT distance; (2) computationally, we accelerate GT both by identifying a strategy for reducing the number of matrix square root computations inherent to the $\ell^2$-Wasserstein distance between Gaussian measures, and by avoiding redundant computations of GT distances between points via enhanced neighborhood mechanisms. We also observe that GT is both a generalization and a strengthening of the mean shift (MS) method, and it is also a computationally efficient specialization of the recently proposed Wasserstein Transform (WT) method. We perform extensive experimentation comparing their performance in different scenarios.