The Internet routing system faces serious scalability challenges, due to the growing number of IP prefixes it needs to propagate throughout the network. For example, the Internet suffered significant outages in August 2014 when the number of globally routable prefixes went past 512K, the default size of the forwarding tables in many older routers. Although IP prefixes are assigned hierarchically, and roughly align with geographic regions, today's Border Gateway Protocol (BGP) and operational practices do not exploit opportunities to aggregate routes. We present a distributed route-aggregation technique (called DRAGON) where nodes analyze BGP routes across different prefixes to determine which of them can be filtered while respecting the routing policies for forwarding data-packets. DRAGON works with BGP, can be deployed incrementally, and offers incentives for ASs to upgrade their router software. We present a theoretical model of route-aggregation, and the design and analysis of DRAGON. Our experiments with realistic assignments of IP prefixes, network topologies, and routing policies show that DRAGON reduces the number of prefixes in each AS by about 80% and significantly curtails the number of routes exchanged during transient periods of convergence.