The federation engine works by effectively building up a single graph by querying each source and merging or unifying the responses. This information is cached, which improves performance, reduces the number of (potentially expensive) remote calls, reduces the load on the sources, and helps mitigate problems with source availability. As clients interact with the repository, this cache is consulted first. When the requested portion of the graph (or "subgraph") is contained completely in the cache, it is retuned immediately. However, if any part of the requested subgraph is not in the cache, each source is consulted for their contributions to that subgraph, and any results are cached.

This basic flow makes it possible for the federated repository to build up a local cache of the integrated graph (or at least the portions that are used by clients). In fact, the federated repository caches information in a manner that is similar to that of the Domain Name System (DNS). As sources are consulted for their contributions, the source also specifies whether it is the authoritative source for this information (some sources that are themselves federated may not be the information's authority), whether the information may be modified, the time-to-live (TTL) value (the time after which the cached information should be refreshed), and the expiration time (the time after which the cached information is no longer valid). In effect, the source has complete control over how the information it contributes is cached and used.

The federated repository also needs to incorporate negative caching , which is storage of the knowledge that something does not exist. Sources can be configured to contribute information only below certain paths (e.g., /A/B/C ), and the federation engine can take advantage of this by never consulting that source for contributions to information on other paths. However, below that path, any negative responses must also be cached (with appropriate TTL and expiry parameters) to prevent the exclusion of that source (in case the source has information to contribute at a later time) or the frequent checking with the source.