A two-way cache system for interfacing with a peripheral device and a method of operating a two-way cache system for carrying out data transmission between a peripheral device and a memory unit. The cache system has a two-way first-in first-out buffer region and a two-way cache controller. The two-way first-in first-out buffer region further has a first cache data region and a second cache data region. The first cache data region and the second cache data region are capable of holding a batch of first cache data and a batch of second cache data. The two-way cache controller receives a read request from the peripheral device. According to the read request, the requested data and data that ensues or comes after the requested data are retained by the two-way first-in first-out buffer (FIFO) region. If the peripheral device continues to request more data by maintaining a FRAME signal line in an enabled state, the first cache data region and the second cache data region are alternately used to read in subsequent data. A check may be made to see if requested data stored inside the two-way cache buffer region is coherent or consistent with data stored inside the memory unit.