Peer-to-peer (P2P) architectures have recently become a popular design choice for building virtual environments (VEs). In P2P-based VEs, peer connectivity between the different VE users depends on their positions in the virtual world regardless of the underlying physical network, which is subject to redundant hops and delay. In this paper, we propose Tri-Cast, a fully-distributed P2P architecture to support virtual environment applications by combining a triangular logical network used for discovering the interest group of an event in the virtual world with an application layer multicast support, used for multicasting the event message to the group members. Simulation results show that the proposed physical multicast tree algorithm reduces the cost of message transmission to group members.