Prompt caching lets a model service reuse work for a prompt prefix that repeats across requests. Everything before the cache boundary must match exactly, including whitespace and tool definitions.
A cache hit avoids some prompt-processing work. This can lower input cost and time to first token, although billing rules, expiry, and minimum prefix lengths vary by provider.
Where it applies: a long, stable system prompt; few-shot examples; a large document or tool schema you ask many questions about. It also fits conversation history that grows by appending.
A common mistake is placing a timestamp or unique request identifier near the top. That changes the prefix on every request and prevents hits. Put stable instructions and examples first, followed by changing conversation or user content. Measure hit rate and savings using current provider rules.
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