The P2P overlay network consists of all the participating peers as network nodes. There are links between any two nodes that know each other: i.e. if a participating peer knows the location of another peer in the P2P network, then there is a directed edge from the former node to the latter in the overlay network. Based on how the nodes in the overlay network are linked to each other, we can classify the P2P networks as unstructured or structured.

An unstructured P2P network is formed when the overlay links are established arbitrarily. Such networks can be easily constructed as a new peer that wants to join the network can copy existing links of another node and then form its own links over time. In an unstructured P2P network, if a peer wants to find a desired piece of data in the network, the query has to be flooded through the network in order to find as many peers as possible that share the data. The main disadvantage with such networks is that the queries may not always be resolved. A popular content is likely to be available at several peers and any peer searching for it is likely to find the same, but, if a peer is looking for a rare or not-so-popular data shared by only a few other peers, then it is highly unlikely that search be successful. Since there is no correlation between a peer and the content managed by it, there is no guarantee that flooding will find a peer that has the desired data. Flooding also causes a high amount of signalling traffic in the network and hence such networks typically have a very poor search efficiency. Most of the popular P2P networks such as Napster, Gnutella and KaZaA are unstructured.

Structured P2P networks overcome the limitations of unstructured networks by maintaining a Distributed Hash Table (DHT) and by allowing each peer to be responsible for a specific part of the content in the network. These networks use hash functions and assign values to every content and every peer in the network and then follow a global protocol in determining which peer is responsible for which content. This way, whenever a peer wants to search for some data, it uses the global protocol to determine the peer(s) responsible for the data and then directs the search towards the responsible peer(s).