Skyline queries have received a lot of attention from database and information retrieval research communities. A skyline query returns a set of data objects that is not dominated by any other data objects in a given dataset. However, most of existing studies focus on skyline query processing in centralized systems. Only recently, skyline queries are considered in a distributed computing environment. Acknowledging the trend toward peer-to-peer (P2P) systems in distributed computing, we examine the problem of skyline query processing in P2P systems and propose innovative solutions. We exploit the data semantic embedded in semantic ally structured P2P overlay networks to efficiently prune search space, without compromising the quality of query result. In addition, we propose approximate algorithms to support skyline queries where exact answers are too costly to obtain. These approximate algorithms produce high quality answers using heuristics based on local semantics of peer nodes. Extensive experiments validate that our algorithms provides high efficiency and scalability to skyline query processing in P2P systems.