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Bluetooth is a promising short-range radio technology for wireless personal area networks. There is an interest to expand the coverage of such networks by interconnecting them to form scatternets. Most of the scatternet formation algorithms recently proposed in the literature do not support dynamic topology changes, and the master of bridge nodes in the resulting scatternet may become the traffic bottleneck and reduce network throughput. In this paper, we propose a two-phase scatternet formation (TPSF) protocol to support dynamic topology changes while maintaining a high aggregate throughput. In the first phase, a control scatternet is constructed to support topology changes and route determination. The second phase creates a separate on-demand scatternet whenever a node wants to initiate data communications with another node. The on-demand scatternet is torn down when the data transmissions are finished. Since all the time slots in an on-demand scatternet are dedicated to a single communication session, a high aggregate throughput is achieved at the expense of a slightly higher connection setup delay.