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Distributed Constraint Satisfaction (DCSP) has long been considered an important problem in multi-agent systems research. This is because many real-world problems can be represented as constraint satisfaction and these problems often present themselves in a distributed form. In this article, we present a new complete, distributed algorithm called Asynchronous Partial Overlay (APO) for solving DCSPs that is based on a cooperative mediation process. The primary ideas behind this algorithm are that agents, when acting as a mediator, centralize small, relevant portions of the DCSP, that these centralized subproblems overlap, and that agents increase the size of their subproblems along critical paths within the DCSP as the problem solving unfolds. We present empirical evidence that shows that APO outperforms other known, complete DCSP techniques.