A distributed scheme for trust inference in peer-to-peer networks is presented. Our work is in context of the NICE system, which is a platform for implementing cooperative applications over the Internet. We describe a technique for efficiently storing user reputation information in a completely decentralized manner, and show how this information can be used to efficiently identify noncooperative users in NICE. We present a simulation based study of our algorithms, in which we show our scheme scales to thousands of users using modest amounts of storage, processing, and bandwidth at any individual node. Lastly, we show that our scheme is robust and can form cooperative groups in systems where the vast majority of users are malicious.