The growing interest in peer-to-peer systems (such as Gnutella) has inspired numerous research activities in this area. Although many demonstrations have been performed that show that the performance of a peer-to-peer system is highly dependent on the underlying network characteristics, much of the evaluation of peer-to-peer proposals has used simplified models that fail to include a detailed model of the underlying network. This can be largely attributed to the complexity in experimenting with a scalable peer-to-peer system simulator built on top of a scalable network simulator with packet-level details. In this work we design and develop a framework for an extensible and scalable peer-to-peer simulation environment that can be built on top of existing packet-level network simulators. The simulation environment is portable to different network simulators, which enables us to simulate a realistic large scale peer-to-peer system using existing parallelization techniques. We demonstrate the use of the simulator for some simple experiments that show how Gnutella system performance can be impacted by the network characteristics.