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Peer-to-peer (P2P) computing has emerged as a popular model aiming at further utilizing Internet information and resources. However, the mechanism of peers randomly choosing logical neighbors without any knowledge about underlying physical topology can cause a serious topology mismatch between the P2P overlay network and the physical underlying network. The topology mismatch problem brings great stress in the Internet infrastructure. It greatly limits the performance gain from various search or routing techniques. Meanwhile, due to the inefficient overlay topology, the flooding-based search mechanisms cause a large volume of unnecessary traffic. Aiming at alleviating the mismatching problem and reducing the unnecessary traffic, we propose a location-aware topology matching (LTM) technique. LTM builds an efficient overlay by disconnecting slow connections and choosing physically closer nodes as logical neighbors while still retaining the search scope and reducing response time for queries. LTM is scalable and completely distributed in the sense that it does not require any global knowledge of the whole overlay network. The effectiveness of LTM is demonstrated through simulation studies.