In this paper, we present a new concept of distributed adaptation and P2P streaming supporting the expansion of context-aware mobile P2P systems. Here, we propose to adapt video contents in a distributed manner to address the peer heterogeneity. It also forms an overlay network and organizes video streaming sessions among the participating peers. We have followed a master-sender-driven approach (one-to-many), with the help of cooperative peers. The essential incentive behind this work is that with the modern computing capabilities, a single peer can carry out sufficient adaptation operations and stream media contents to other peers. Overall design and adaptation approach along with the performance evaluation is presented in brief.