A multithreaded processor with a banked cache is provided. The instruction set includes at least one atomic operation which is executed in the L2 cache if the atomic memory address source data is aligned. The core executing the instruction determines whether the atomic memory address source data is aligned. If it is aligned, the atomic memory address is sent to the bank that contains the atomic memory address source data, and the operation is executed in the bank. In one embodiment, if the instruction is mis-aligned, the operation is executed in the core.