Overlay network peers may be grouped so that each peer in a peer group has a similar transport network proximity measure with respect to the peers in other peer groups. A first set of transport network distances may include distances between a peer group and peer group neighbors of the peer group. A second set of distances may include distances between a peer and the peer group neighbors of the peer group. The peer may decide to join the peer group if the first set of distances is near to the second set. A first peer group may query a second peer group for the second peer group's neighboring peer groups. The distance between the first peer group and each of the second peer group's neighbors may be measured. Overlay network connections may be established between the first peer group and the closest of the second peer group's neighbors.