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A dynamic optimizer is a runtime software system that groups a program's instruction sequences into traces, optimizes those traces, stores the optimized traces in a software-based code cache, and then executes the optimized code in the code cache. To maximize performance, the vast majority of the program's execution should occur in the code cache and not in the different aspects of the dynamic optimization system. In the past, designers of dynamic optimizers have used the SPEC2000 benchmark suite to justify their use of simple code cache management schemes. In this paper, we show that the problem and importance of code cache management changes dramatically as we move from SPEC2000, with its relatively small number of dynamically generated code traces, to large interactive Windows applications. We also propose and evaluate a new cache management algorithm based on generational code caches that results in an average miss rate reduction of 18% over a unified cache, which translates into 19% fewer instructions spent in the dynamic optimizer. The algorithm categorizes code traces based on their expected lifetimes and group traces with similar lifetimes together in separate storage areas. Using this algorithm, short-lived code traces can easily be removed from a code cache without introducing fragmentation and without suffering the performance penalties associated with evicting long-lived code traces.