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 hand, is more efficient, especially in a heterogeneous environment where nodes have different processing capabilities.