Based on distributed performance enhancing proxies, a new transport protocol for the satellite environment, the XP protocol is presented. It is designed and opt imized to overcome the performance degradation that TCP experiences in satellite networks due to their long latency, high bit error rate, and bandwidth asymmetr y characteristics. Main contributions include a reliable two-and-half-way handsh ake connection establishment mechanism, rate control and a measurement-based ada ptive bandwidth allocation algorithm, and a delayed acknowledgements technique b ased on active sender-request. Interactions with the TCP connections in terrestr ial segments are also considered. Emulation and real operating environment exper iments show that the throughputs achieved by XP improve substantially in compari son with the regular TCP, and the fairness is also maintained perfectively when the bandwidth is shared among multi-connections.