This paper proposes a semantic overlay based on the small world phenomenon that facilitates efficient search for information retrieval in unstructured P2P systems. In the semantic overlay, each node maintains a number of short-range links which are semantically similar to each other, together with a small collection of long-range links that help increasing recall rate of information retrieval and reduce network traffic as well. Experimental results show that our model can improve performance by 150% compared to Gnutella and by up to 60% compared to the Interest-based model - a similar shortcut-based search technique. Categories and Subject Descriptors H.3.3 [Information Storage and Retrieval]: Information Search and Retrieval - Retrieval Models General Terms Algorithms, Experimentation, Performance Keywords Peer-to-Peer, Semantic, Small World, Information Retrieval