— This paper presents a novel approach for efficient tree construction in ALM (Application Layer Multicast) using layered video coding. This system is suitable for the users in heterogeneous environment such as xDSL and CATV, where upload and download speeds are different. We point out some problems in these environment of the ALM and show their solutions at two stages. First, we redefine the “degree parameter” which originally specifies the number of single rate streams the host can transmit, to reflect asymmetric link properties and to accommodate layered streams. Second, we develop an efficient tree construction algorithm using the renewed degree parameter, which maximizes total throughput of all hosts. Simulations using NS-2 prove improvement in throughput, delay and overhead by our proposal. Software implementation is also carried out, and subjective quality improvement is verified. Keywords—application layer multicast, overlay