diff --git a/router/src/infer/v3/block_allocator.rs b/router/src/infer/v3/block_allocator.rs
index 7467fd85..9e27b8a6 100644
--- a/router/src/infer/v3/block_allocator.rs
+++ b/router/src/infer/v3/block_allocator.rs
@@ -1,4 +1,10 @@
-use std::cmp::min;
+use itertools::Itertools;
+use std::{
+    borrow::BorrowMut,
+    cmp::min,
+    collections::{hash_map::Entry, HashMap},
+    hash::{DefaultHasher, Hash, Hasher},
+};
 use tokio::sync::{mpsc, oneshot};
 
 #[derive(Debug, Clone)]
@@ -134,3 +140,200 @@ enum BlockAllocatorCommand {
         response_sender: oneshot::Sender<Option<(Vec<u32>, Vec<u32>)>>,
     },
 }
+
+#[derive(Debug, Clone, Eq, PartialEq)]
+pub(crate) struct BlockAllocationWithCache {
+    pub blocks: Vec<u32>,
+    pub slots: Vec<u32>,
+}
+
+#[derive(Debug)]
+struct BlockState {
+    block_id: u32,
+    last_accessed: u64,
+    ref_count: usize,
+}
+
+pub struct PrefixCache {
+    block_size: usize,
+    cache_partial: bool,
+    free_blocks: Vec<u32>,
+    cache_blocks: HashMap<u64, BlockState>,
+
+    // Avoid a system call, use a counter for time.
+    time: u64,
+}
+
+impl PrefixCache {
+    pub fn new(block_size: usize, n_blocks: usize, cache_partial: bool) -> Self {
+        PrefixCache {
+            block_size,
+            cache_blocks: HashMap::new(),
+            cache_partial,
+            free_blocks: (1..n_blocks as u32).collect(),
+            time: 0,
+        }
+    }
+
+    fn alloc(
+        &mut self,
+        mut n_tokens: usize,
+        prefill_tokens: &[u32],
+    ) -> Option<BlockAllocationWithCache> {
+        // First try to lookup prefix.
+        let mut hasher = DefaultHasher::new();
+        let mut tokens_from_cache = 0;
+        let mut cache_blocks_hashes = Vec::new();
+        for prefill_chunk in prefill_tokens.chunks(self.block_size) {
+            if prefill_chunk.len() < self.block_size && !self.cache_partial {
+                break;
+            }
+
+            prefill_chunk.hash(&mut hasher);
+
+            match self.cache_blocks.get_mut(&hasher.finish()) {
+                Some(state) => {
+                    state.ref_count += 1;
+                }
+                None => todo!(),
+            }
+
+            if !self.cache_blocks.contains_key(&hasher.finish()) {
+                break;
+            }
+
+            tokens_from_cache += prefill_chunk.len();
+            cache_blocks_hashes.push(hasher.finish());
+        }
+
+        let blocks = self.alloc_or_reclaim(n_tokens - tokens_from_cache)?;
+
+        let mut prefix_cache_blocks = Vec::new();
+        for hash in cache_blocks_hashes {
+            match self.cache_blocks.get_mut(&hash) {
+                Some(info) => {
+                    info.ref_count += 1;
+                    prefix_cache_blocks.push(info.block_id);
+                }
+                None => unreachable!(),
+            }
+        }
+
+        prefix_cache_blocks.extend(blocks);
+
+        let mut slots = Vec::with_capacity(n_tokens);
+        for block_id in prefix_cache_blocks.iter() {
+            for s in
+                (*block_id * self.block_size as u32)..((*block_id + 1) * self.block_size as u32)
+            {
+                slots.push(s);
+                if slots.len() == n_tokens {
+                    break;
+                }
+            }
+        }
+
+        Some(BlockAllocationWithCache {
+            blocks: prefix_cache_blocks,
+            slots,
+        })
+    }
+
+    fn alloc_or_reclaim(&mut self, n_tokens: usize) -> Option<Vec<u32>> {
+        let n_blocks = (n_tokens + self.block_size - 1) / self.block_size;
+        let n_blocks_needed = if n_tokens > self.free_blocks.len() {
+            n_blocks - self.free_blocks.len()
+        } else {
+            0
+        };
+
+        if n_blocks_needed > 0 {
+            let removable_blocks = self
+                .cache_blocks
+                .iter_mut()
+                // Block must be unused.
+                .filter(|(_, state)| state.ref_count == 0)
+                // Remove most recent block first.
+                // TODO: we are not yet removing a prefix in reverse order.
+                .sorted_by_key(|(_, state)| state.last_accessed)
+                // Find enough candidates.
+                .take(n_blocks_needed)
+                .map(|(block_hash, block_state)| (*block_hash, block_state.block_id))
+                .collect::<Vec<_>>();
+
+            if removable_blocks.len() < n_blocks_needed {
+                return None;
+            }
+
+            for (block_hash, block_id) in removable_blocks.into_iter() {
+                self.free_blocks.push(block_id);
+                self.cache_blocks.remove(&block_hash);
+            }
+        }
+
+        Some(
+            self.free_blocks
+                .split_off(self.free_blocks.len() - n_blocks),
+        )
+    }
+
+    fn free(&mut self, blocks: &[u32], prefill_tokens: &[u32]) {
+        let mut hasher = DefaultHasher::new();
+
+        for (prefill_chunk, block_id) in prefill_tokens.chunks(self.block_size).zip(blocks.iter()) {
+            if prefill_chunk.len() < self.block_size && !self.cache_partial {
+                break;
+            }
+
+            prefill_chunk.hash(&mut hasher);
+
+            match self.cache_blocks.entry(hasher.finish()) {
+                Entry::Occupied(mut entry) => {
+                    let value = entry.get_mut();
+                    value.last_accessed = self.time;
+                    assert!(value.ref_count > 0);
+                    value.ref_count -= 1;
+                }
+                Entry::Vacant(entry) => {
+                    entry.insert(BlockState {
+                        block_id: *block_id,
+                        last_accessed: self.time,
+                        ref_count: 0,
+                    });
+                }
+            };
+        }
+
+        self.time += 1;
+    }
+}
+
+#[cfg(test)]
+mod tests {
+    use crate::infer::v3::block_allocator::BlockAllocationWithCache;
+
+    use super::PrefixCache;
+
+    #[test]
+    fn test_prefix_cache() {
+        let mut cache = PrefixCache::new(4, 3, false);
+        let allocation = cache.alloc(8, &[0, 1, 2, 3]);
+        assert_eq!(
+            allocation,
+            Some(BlockAllocationWithCache {
+                blocks: vec![1, 2],
+                slots: (4..12).collect()
+            })
+        );
+        cache.free(&allocation.unwrap().blocks, &[0, 1, 2, 3]);
+
+        let allocation = cache.alloc(8, &[0, 1, 2, 3]);
+        assert_eq!(
+            allocation,
+            Some(BlockAllocationWithCache {
+                blocks: vec![1, 2],
+                slots: (4..12).collect()
+            })
+        );
+    }
+}