In this letter, a decentralized scatternet formation algorithm called Bluelayer is proposed. First, Bluelayer uses a designated root to construct a tree-shaped subnet and propagates an integer variable k1 called counter limit as well as a constant k in its downstream direction to determine new roots. Then each new root asks its upstream master to start a return connection procedure to convert the tree-shaped subnet into a web-shaped subnet for its immediate upstream root. At the same time, each new root repeats the same procedure as the root to build its own subnet until the whole scatternet is formed. Simulation results show that Bluelayer achieves good network scalability and generates an efficient scatternet configuration for various sizes of Bluetooth ad hoc network.