A self-organizing peer-to-peer system is built upon an application level overlay, whose topology is independent of underlying physical network. A well-routed message path in such systems may result in a long delay and excessive traffic due to the mismatch between logical and physical networks. In order to solve this problem, we present a family of Peer-exchange Routing Optimization Protocols (PROP) to reconstruct the overlay. It includes two policies: PROPG for generic condition and PROP-O for optimized one. Both theoretical analysis and simulation experiments show that these two protocols greatly reduce the average latency of the overlay and achieve a location-aware topology with low overhead. Their overall performance can be further improved if combined with other recent approaches. Specifically, PROP-G can be easily applied to both structured and unstructured systems without the loss of their primary characteristics, such as efficient routing and anonymity. PROPO, on the other h...