In order to improve the searching efficiency of the classical Chord algorithm which is applied to the second generation of P2P network, we studied the Chord algorithm based on the polycyclic structure. Combining the multi-ring structure with group structure, polycyclic Chord algorithm links the whole nodes into multiple rings with recursive algorithm and uses active node in one group to record all routing information of the groups. In this paper, a new approach of entry of traditional routing table was proposed and a new description of successor node using grouping ideas was made which can reduce the amount of redundant information. Analysis shows that the Polycyclic Chord algorithm gains clear advantage over the original Chord algorithm in the terms of time complexity. Meanwhile, since the grouping strategy was involved in the new algorithm, a preliminary study about the grouping parameter k was also made in order to improve the effectiveness and efficiency of query. Finally, experimental results showed that the Polycyclic Chord algorithm can effectively reduce the average query hop while maintaining the other performance of the chord algorithm.