A system and method for providing in-server caching of shared data involves a server program that defines a server cache in RAM of a server machine and stores a selected file in the server cache. If a cached file is modified through the file system interface of the operating system of the server machine, the operating system automatically issues an upcall to the server program, the upcall identifying the modified file. In response to receipt of the upcall, the server program removes the modified file from the server cache. In one embodiment, the server program responds to a client request requiring access to a requested file by obtaining the requested file from the server cache if the server cache contains that file. Otherwise, the server program calls the operating system to obtain the requested file and then adds that file to the server cache as a cached file. The server program then generates a result based on the requested file and transmits the result to the remote data processing system.