diff --git a/Rakefile b/Rakefile
index fff9ce1c53f5..3fc7fd49fd7b 100644
--- a/Rakefile
+++ b/Rakefile
@@ -16,6 +16,7 @@ ANGULAR = [
   'src/filters.js',
   'src/formatters.js',
   'src/validators.js',
+  'src/service/cacheFactory.js',
   'src/service/cookieStore.js',
   'src/service/cookies.js',
   'src/service/defer.js',
diff --git a/src/Browser.js b/src/Browser.js
index 554397626031..3f507075865a 100644
--- a/src/Browser.js
+++ b/src/Browser.js
@@ -7,11 +7,7 @@ var XHR = window.XMLHttpRequest || function () {
   try { return new ActiveXObject("Msxml2.XMLHTTP"); } catch (e3) {}
   throw new Error("This browser does not support XMLHttpRequest.");
 };
-var XHR_HEADERS = {
-  "Content-Type": "application/x-www-form-urlencoded",
-  "Accept": "application/json, text/plain, */*",
-  "X-Requested-With": "XMLHttpRequest"
-};
+
 
 /**
  * @private
@@ -103,7 +99,7 @@ function Browser(window, document, body, XHR, $log) {
     } else {
       var xhr = new XHR();
       xhr.open(method, url, true);
-      forEach(extend(XHR_HEADERS, headers || {}), function(value, key){
+      forEach(headers, function(value, key){
         if (value) xhr.setRequestHeader(key, value);
       });
       xhr.onreadystatechange = function() {
diff --git a/src/angular-bootstrap.js b/src/angular-bootstrap.js
index 946968abf7ba..80d665204a20 100644
--- a/src/angular-bootstrap.js
+++ b/src/angular-bootstrap.js
@@ -119,6 +119,7 @@
 
              // Extension points
 
+             'service/cacheFactory.js',
              'service/cookieStore.js',
              'service/cookies.js',
              'service/defer.js',
diff --git a/src/service/cacheFactory.js b/src/service/cacheFactory.js
new file mode 100644
index 000000000000..42d36d5f0293
--- /dev/null
+++ b/src/service/cacheFactory.js
@@ -0,0 +1,151 @@
+/**
+ * @workInProgress
+ * @ngdoc service
+ * @name angular.service.$cacheFactory
+ *
+ * @description
+ * Factory that constructs cache objects.
+ *
+ *
+ * @param {string} cacheId Name or id of the newly created cache.
+ * @param {object=} options Options object that specifies the cache behavior. Properties:
+ *
+ *   - `{number=}` `capacity` — turns the cache into LRU cache.
+ *
+ * @returns {object} Newly created cache object with the following set of methods:
+ *
+ * - `{string}` `id()` — Returns id or name of the cache.
+ * - `{number}` `size()` — Returns number of items currently in the cache
+ * - `{void}` `put({string} key, {*} value)` — Puts a new key-value pair into the cache
+ * - `{(*}} `get({string} key) — Returns cached value for `key` or undefined for cache miss.
+ * - `{void}` `remove{string} key) — Removes a key-value pair from the cache.
+ * - `{void}` `removeAll() — Removes all cached values.
+ *
+ */
+angularServiceInject('$cacheFactory', function() {
+
+  var caches = {};
+
+  function cacheFactory(cacheId, options) {
+    if (cacheId in caches) {
+      throw Error('cacheId ' + cacheId + ' taken');
+    }
+
+    var size = 0,
+        stats = extend({}, options, {id: cacheId}),
+        data = {},
+        capacity = (options && options.capacity) || Number.MAX_VALUE,
+        lruHash = {},
+        freshEnd = null,
+        staleEnd = null;
+
+    return caches[cacheId] = {
+
+      put: function(key, value) {
+        var lruEntry = lruHash[key] || (lruHash[key] = {key: key});
+
+        refresh(lruEntry);
+
+        if (isUndefined(value)) return;
+        if (!(key in data)) size++;
+        data[key] = value;
+
+        if (size > capacity) {
+          this.remove(staleEnd.key);
+        }
+      },
+
+
+      get: function(key) {
+        var lruEntry = lruHash[key];
+
+        if (!lruEntry) return;
+
+        refresh(lruEntry);
+
+        return data[key];
+      },
+
+
+      remove: function(key) {
+        var lruEntry = lruHash[key];
+
+        if (lruEntry == freshEnd) freshEnd = lruEntry.p;
+        if (lruEntry == staleEnd) staleEnd = lruEntry.n;
+        link(lruEntry.n,lruEntry.p);
+
+        delete lruHash[key];
+        delete data[key];
+        size--;
+      },
+
+
+      removeAll: function() {
+        data = {};
+        size = 0;
+        lruHash = {};
+        freshEnd = staleEnd = null;
+      },
+
+
+      destroy: function() {
+        data = null;
+        stats = null;
+        lruHash = null;
+        delete caches[cacheId];
+      },
+
+
+      info: function() {
+        return extend({}, stats, {size: size});
+      }
+    }
+
+
+    /**
+     * makes the `entry` the freshEnd of the LRU linked list
+     */
+    function refresh(entry) {
+      if (entry != freshEnd) {
+        if (!staleEnd) {
+          staleEnd = entry;
+        } else if (staleEnd == entry) {
+          staleEnd = entry.n;
+        }
+
+        link(entry.n, entry.p);
+        link(entry, freshEnd);
+        freshEnd = entry;
+        freshEnd.n = null;
+      }
+    }
+
+
+    /**
+     * bydirectionally links two entries of the LRU linked list
+     */
+    function link(nextEntry, prevEntry) {
+      if (nextEntry != prevEntry) {
+        if (nextEntry) nextEntry.p = prevEntry; //p stands for previous, 'prev' didn't minify
+        if (prevEntry) prevEntry.n = nextEntry; //n stands for next, 'next' didn't minify
+      }
+    }
+  }
+
+
+  cacheFactory.info = function() {
+    var info = {};
+    forEach(caches, function(cache, cacheId) {
+      info[cacheId] = cache.info();
+    });
+    return info;
+  }
+
+
+  cacheFactory.get = function(cacheId) {
+    return caches[cacheId];
+  }
+
+
+  return cacheFactory;
+});
diff --git a/src/service/xhr.js b/src/service/xhr.js
index 18f695e6751d..42682b7b5296 100644
--- a/src/service/xhr.js
+++ b/src/service/xhr.js
@@ -126,7 +126,7 @@
    </doc:example>
  */
 angularServiceInject('$xhr', function($browser, $error, $log, $updateView){
-  return function(method, url, post, callback){
+  function xhr(method, url, post, callback){
     if (isFunction(post)) {
       callback = post;
       post = null;
@@ -137,12 +137,6 @@ angularServiceInject('$xhr', function($browser, $error, $log, $updateView){
 
     $browser.xhr(method, url, post, function(code, response){
       try {
-        if (isString(response)) {
-          if (response.match(/^\)\]\}',\n/)) response=response.substr(6);
-          if (/^\s*[\[\{]/.exec(response) && /[\}\]]\s*$/.exec(response)) {
-            response = fromJson(response, true);
-          }
-        }
         if (200 <= code && code < 300) {
           callback(code, response);
         } else {
@@ -155,8 +149,39 @@ angularServiceInject('$xhr', function($browser, $error, $log, $updateView){
       } finally {
         $updateView();
       }
-    }, {
+    }, extend({}, xhr.defaults.request.headers, {
         'X-XSRF-TOKEN': $browser.cookies()['XSRF-TOKEN']
-    });
+    }));
   };
+  
+  
+  xhr.defaults = {
+    request:{
+      headers: {
+        "Content-Type": "application/x-www-form-urlencoded",
+        "Accept": "application/json, text/plain, */*",
+        "X-Requested-With": "XMLHttpRequest"
+      },
+      filters: [] //xsrf
+    },
+    
+    response: {
+      filters: [jsonSec, jsonDeser]
+    }
+  }
+
+
+  function jsonSec(response) {
+    if (response.match(/^\)\]\}',\n/)) return response.substr(6);
+  }
+
+  function jsonDeser(response) {
+    if (/^\s*[\[\{]/.exec(response) && /[\}\]]\s*$/.exec(response)) {
+      return fromJson(response, true);
+    }
+  }
+  
+  
+  return xhr;
+  
 }, ['$browser', '$xhr.error', '$log', '$updateView']);
diff --git a/src/widgets.js b/src/widgets.js
index 6d5ffe65267f..20955f5ef3aa 100644
--- a/src/widgets.js
+++ b/src/widgets.js
@@ -1059,9 +1059,12 @@ angularWidget('ng:view', function(element) {
 
   if (!element[0]['ng:compiled']) {
     element[0]['ng:compiled'] = true;
-    return injectService(['$xhr.cache', '$route'], function($xhr, $route, element){
-      var parentScope = this,
-          childScope;
+    return injectService(['$xhr', '$route', '$cacheFactory', '$defer'],
+        function($xhr, $route, $cacheFactory, $defer, element){
+      var templateCache = $cacheFactory('ng:view'),
+          parentScope = this,
+          childScope,
+          template;
 
       $route.onChange(function(){
         var src;
@@ -1072,11 +1075,19 @@ angularWidget('ng:view', function(element) {
         }
 
         if (src) {
-          //xhr's callback must be async, see commit history for more info
-          $xhr('GET', src, function(code, response){
-            element.html(response);
-            compiler.compile(element)(childScope);
-          });
+          if (template = templateCache.get(src)) {
+            //this must be async see 9bd2c396 for more info
+            $defer(function() {
+              element.html(template);
+              compiler.compile(element)(childScope);
+            });
+          } else {
+            $xhr('GET', src, function(code, response){
+              templateCache.put(src, response);
+              element.html(response);
+              compiler.compile(element)(childScope);
+            });
+          }
         } else {
           element.html('');
         }
diff --git a/test/BrowserSpecs.js b/test/BrowserSpecs.js
index 3b5a9ba03651..9c74021584e1 100644
--- a/test/BrowserSpecs.js
+++ b/test/BrowserSpecs.js
@@ -109,12 +109,7 @@ describe('browser', function(){
       expect(xhr.method).toEqual('METHOD');
       expect(xhr.url).toEqual('URL');
       expect(xhr.post).toEqual('POST');
-      expect(xhr.headers).toEqual({
-        "Content-Type": "application/x-www-form-urlencoded",
-        "Accept": "application/json, text/plain, */*",
-        "X-Requested-With": "XMLHttpRequest",
-        "X-header":"value"
-      });
+      expect(xhr.headers).toEqual({"X-header":"value"});
 
       xhr.status = 202;
       xhr.responseText = 'RESPONSE';
diff --git a/test/service/cacheFactorySpec.js b/test/service/cacheFactorySpec.js
new file mode 100644
index 000000000000..f0af9b443539
--- /dev/null
+++ b/test/service/cacheFactorySpec.js
@@ -0,0 +1,325 @@
+describe('$cacheFactory', function() {
+
+  var scope, $cacheFactory;
+
+  beforeEach(function() {
+    scope = angular.scope();
+    $cacheFactory = scope.$service('$cacheFactory');
+  });
+
+
+  it('should be injected', function() {
+    expect($cacheFactory).toBeDefined();
+  });
+
+
+  it('should return a new cache whenever called', function() {
+    var cache1 = $cacheFactory('cache1');
+    var cache2 = $cacheFactory('cache2');
+    expect(cache1).not.toEqual(cache2);
+  });
+
+
+  it('should complain if the cache id is being reused', function() {
+    $cacheFactory('cache1');
+    expect(function() {$cacheFactory('cache1')}).
+      toThrow('cacheId cache1 taken');
+  });
+
+
+  describe('info', function() {
+
+    it('should provide info about all created caches', function() {
+      expect($cacheFactory.info()).toEqual({});
+
+      var cache1 = $cacheFactory('cache1');
+      expect($cacheFactory.info()).toEqual({cache1: {id: 'cache1', size: 0}});
+
+      cache1.put('foo', 'bar');
+      expect($cacheFactory.info()).toEqual({cache1: {id: 'cache1', size: 1}});
+    });
+  });
+
+
+  describe('get', function() {
+
+    it('should return a cache if looked up by id', function() {
+      var cache1 = $cacheFactory('cache1'),
+          cache2 = $cacheFactory('cache2');
+
+      expect(cache1).not.toBe(cache2);
+      expect(cache1).toBe($cacheFactory.get('cache1'));
+      expect(cache2).toBe($cacheFactory.get('cache2'));
+    });
+  });
+
+  describe('cache', function() {
+    var cache;
+
+    beforeEach(function() {
+      cache = $cacheFactory('test');
+    });
+
+
+    describe('put, get & remove', function() {
+
+      it('should add cache entries via add and retrieve them via get', function() {
+        cache.put('key1', 'bar');
+        cache.put('key2', {bar:'baz'});
+
+        expect(cache.get('key2')).toEqual({bar:'baz'});
+        expect(cache.get('key1')).toBe('bar');
+      });
+
+
+      it('should ignore put if the value is undefined', function() {
+        cache.put();
+        cache.put('key1');
+        cache.put('key2', undefined);
+
+        expect(cache.info().size).toBe(0);
+      });
+
+
+      it('should remove entries via remove', function() {
+        cache.put('k1', 'foo');
+        cache.put('k2', 'bar');
+
+        cache.remove('k2');
+
+        expect(cache.get('k1')).toBe('foo');
+        expect(cache.get('k2')).toBeUndefined();
+
+        cache.remove('k1');
+
+        expect(cache.get('k1')).toBeUndefined();
+        expect(cache.get('k2')).toBeUndefined();
+      });
+
+
+      it('should stringify keys', function() {
+        cache.put('123', 'foo');
+        cache.put(123, 'bar');
+
+        expect(cache.get('123')).toBe('bar');
+        expect(cache.info().size).toBe(1);
+
+        cache.remove(123);
+        expect(cache.info().size).toBe(0);
+      })
+    });
+
+
+    describe('info', function() {
+
+      it('should size increment with put and decrement with remove', function() {
+        expect(cache.info().size).toBe(0);
+
+        cache.put('foo', 'bar');
+        expect(cache.info().size).toBe(1);
+
+        cache.put('baz', 'boo');
+        expect(cache.info().size).toBe(2);
+
+        cache.remove('baz');
+        expect(cache.info().size).toBe(1);
+
+        cache.remove('foo');
+        expect(cache.info().size).toBe(0);
+      });
+
+
+      it('should return cache id', function() {
+        expect(cache.info().id).toBe('test');
+      })
+    });
+
+
+    describe('removeAll', function() {
+
+      it('should blow away all data', function() {
+        cache.put('id1', 1);
+        cache.put('id2', 2);
+        cache.put('id3', 3);
+        expect(cache.info().size).toBe(3);
+
+        cache.removeAll();
+
+        expect(cache.info().size).toBe(0);
+        expect(cache.get('id1')).toBeUndefined();
+        expect(cache.get('id2')).toBeUndefined();
+        expect(cache.get('id3')).toBeUndefined();
+      });
+    });
+
+
+    describe('destroy', function() {
+
+      it('should make the cache unusable and remove references to it from $cacheFactory', function() {
+        cache.put('foo', 'bar');
+        cache.destroy();
+
+        expect(function() { cache.get('foo') } ).toThrow();
+        expect(function() { cache.get('neverexisted') }).toThrow();
+        expect(function() { cache.put('foo', 'bar') }).toThrow();
+
+        expect($cacheFactory.get('test')).toBeUndefined();
+        expect($cacheFactory.info()).toEqual({});
+      });
+    });
+  });
+
+
+  describe('LRU cache', function() {
+
+    it('should create cache with defined capacity', function() {
+      cache = $cacheFactory('cache1', {capacity: 5});
+      expect(cache.info().size).toBe(0);
+
+      for (var i=0; i<5; i++) {
+        cache.put('id' + i, i);
+      }
+
+      expect(cache.info().size).toBe(5);
+
+      cache.put('id5', 5);
+      expect(cache.info().size).toBe(5);
+      cache.put('id6', 6);
+      expect(cache.info().size).toBe(5);
+    });
+
+
+    describe('eviction', function() {
+
+      beforeEach(function() {
+        cache = $cacheFactory('cache1', {capacity: 2});
+
+        cache.put('id0', 0);
+        cache.put('id1', 1);
+      });
+
+
+      it('should kick out the first entry on put', function() {
+        cache.put('id2', 2);
+        expect(cache.get('id0')).toBeUndefined();
+        expect(cache.get('id1')).toBe(1);
+        expect(cache.get('id2')).toBe(2);
+      });
+
+
+      it('should refresh an entry via get', function() {
+        cache.get('id0');
+        cache.put('id2', 2);
+        expect(cache.get('id0')).toBe(0);
+        expect(cache.get('id1')).toBeUndefined();
+        expect(cache.get('id2')).toBe(2);
+      });
+
+
+      it('should refresh an entry via put', function() {
+        cache.put('id0', '00');
+        cache.put('id2', 2);
+        expect(cache.get('id0')).toBe('00');
+        expect(cache.get('id1')).toBeUndefined();
+        expect(cache.get('id2')).toBe(2);
+      });
+
+
+      it('should not purge an entry if another one was removed', function() {
+        cache.remove('id1');
+        cache.put('id2', 2);
+        expect(cache.get('id0')).toBe(0);
+        expect(cache.get('id1')).toBeUndefined();
+        expect(cache.get('id2')).toBe(2);
+      });
+
+
+      it('should purge the next entry if the stalest one was removed', function() {
+        cache.remove('id0');
+        cache.put('id2', 2);
+        cache.put('id3', 3);
+        expect(cache.get('id0')).toBeUndefined();
+        expect(cache.get('id1')).toBeUndefined();
+        expect(cache.get('id2')).toBe(2);
+        expect(cache.get('id3')).toBe(3);
+      });
+
+
+      it('should correctly recreate the linked list if all cache entries were removed', function() {
+        cache.remove('id0');
+        cache.remove('id1');
+        cache.put('id2', 2);
+        cache.put('id3', 3);
+        cache.put('id4', 4);
+        expect(cache.get('id0')).toBeUndefined();
+        expect(cache.get('id1')).toBeUndefined();
+        expect(cache.get('id2')).toBeUndefined();
+        expect(cache.get('id3')).toBe(3);
+        expect(cache.get('id4')).toBe(4);
+      });
+
+
+      it('should blow away the entire cache via removeAll and start evicting when full', function() {
+        cache.put('id0', 0);
+        cache.put('id1', 1);
+        cache.removeAll();
+
+        cache.put('id2', 2);
+        cache.put('id3', 3);
+        cache.put('id4', 4);
+
+        expect(cache.info().size).toBe(2);
+        expect(cache.get('id0')).toBeUndefined();
+        expect(cache.get('id1')).toBeUndefined();
+        expect(cache.get('id2')).toBeUndefined();
+        expect(cache.get('id3')).toBe(3);
+        expect(cache.get('id4')).toBe(4);
+      });
+
+
+      it('should correctly refresh and evict items if operations are chained', function() {
+        cache = $cacheFactory('cache2', {capacity: 3});
+
+        cache.put('id0', 0); //0
+        cache.put('id1', 1); //1,0
+        cache.put('id2', 2); //2,1,0
+        cache.get('id0');    //0,2,1
+        cache.put('id3', 3); //3,0,2
+        cache.put('id0', 9); //0,3,2
+        cache.put('id4', 4); //4,0,3
+
+        expect(cache.get('id3')).toBe(3);
+        expect(cache.get('id0')).toBe(9);
+        expect(cache.get('id4')).toBe(4);
+
+        cache.remove('id0'); //4,3
+        cache.remove('id3'); //4
+        cache.put('id5', 5); //5,4
+        cache.put('id6', 6); //6,5,4
+        cache.get('id4');    //4,6,5
+        cache.put('id7', 7); //7,4,6
+
+        expect(cache.get('id0')).toBeUndefined();
+        expect(cache.get('id1')).toBeUndefined();
+        expect(cache.get('id2')).toBeUndefined();
+        expect(cache.get('id3')).toBeUndefined();
+        expect(cache.get('id4')).toBe(4);
+        expect(cache.get('id5')).toBeUndefined();
+        expect(cache.get('id6')).toBe(6);
+        expect(cache.get('id7')).toBe(7);
+
+        cache.removeAll();
+        cache.put('id0', 0); //0
+        cache.put('id1', 1); //1,0
+        cache.put('id2', 2); //2,1,0
+        cache.put('id3', 3); //3,2,1
+
+        expect(cache.info().size).toBe(3);
+        expect(cache.get('id0')).toBeUndefined();
+        expect(cache.get('id1')).toBe(1);
+        expect(cache.get('id2')).toBe(2);
+        expect(cache.get('id3')).toBe(3);
+      });
+    });
+  });
+});