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In my Win2k8 AD server the default group policy maps a drive letter to a geographically distant site connected via VPN.

Normally typing in the network path in the Explorer address takes at least 10 secs to load, but access via the drive mapping e.g. T:\ is almost instant.

I can only guess that the server is caching the files (something like 500GB worth of data)

Is this the case? If so, where can I configure or check the cache settings?

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Yes, caching occurs for files and directories on a network share as well. The Technet docs which were written for Windows 2000 but still apply to newer versions state:

When Windows 2000 Server file servers are accessed by Windows 2000 Professional clients, files accessed across the network are subject to memory-resident caching on both the server and the client side!

The cache is not separated between "networked" and local objects, it just will cache everything. The Sysinternals CacheSet utility has a simplistic interface for monitoring and managing the cache.

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