Single-cell RNA sequencing (scRNA-seq) provides a powerful tool to determine expression patterns of thousands of individual cells. However, the analysis of scRNA-seq data remains a computational challenge due to the high technical noise such as the presence of dropout events that lead to a large proportion of zeros for expressed genes. Taking into account the cell heterogeneity and the relationship between dropout rate and expected expression level, we present a cell sub-population based bounded low-rank (PBLR) method to impute the dropouts of scRNA-seq data. Through application to both simulated and real scRNA-seq datasets, PBLR is shown to be effective in recovering dropout events, and it can dramatically improve the low-dimensional representation and the recovery of gene‒gene relationships masked by dropout events compared to several state-of-the-art methods. Moreover, PBLR also detects accurate and robust cell sub-populations automatically, shedding light on its flexibility and generality for scRNA-seq data analysis.