Overlay networks are a technique whereby application developers create virtual customized networks on top of physical networks. Recent implementations of peer-to-peer applications such as file sharing and VoIP have increasingly meant that overlay networks have almost become ubiquitous. As a result, future overlay networks will increasingly coexist on the same node. A number of middleware frameworks such as GRIDKIT [1], P2 [2] and ODIN-S [3] currently offer support for the co-existence of multiple overlay networks. However, co-existing overlay networks interfere with each other’s performance either through competition for resources or the lack of collaboration between them. This paper introduces an approach called virtual overlays which manages competition and collaboration between co-existing overlay networks in a way that is expressive, flexible, configurable and dynamically adaptable.