A method and system for designing file replication schemes in file sharing systems consider node storage constraints and node up/down statistics, file storage costs, and file transfer costs among the nodes, user request rates for the files, and user specified file availability requirements. Based on these considerations, a systematic method for designing file replication schemes can be implemented. The method first determines the number of copies of the files to be stored in the system to achieve the desired goal (e.g., to satisfy file availability requirements, or to maximize the system hit rate), and then selects the nodes at which to store the file copies to minimize the total expected cost. The file replication scheme for a peer-to-peer file sharing system in a distributed and adaptive manner can scale to a large number of nodes and files and can handle changes in the user request pattern over time.