Systems and methods are described for providing a proxied filesystem in a hosted computing environment. A provider of hosted computing services provides a filesystem proxy server. The server proxies filesystems on a client computing device utilizing the hosted computing environment, enabling the resources of the hosted computing environment to access the filesystems of the client computing device. Requests for resources in the proxied filesystem may be cached, and updates to cached resources may be communicated as a set of changes that, when applied to the cached resource, transform it into the current version of the resource. The filesystem proxy server may proxy read requests, write requests, requests for information pertaining to the filesystem, and may be implemented within a virtual machine in the hosted computing environment or as a standalone service.