A novel system and method is provided for improving object cacheability in an ICAP-configured network cache. Unlike prior implementations, the present invention does not require the network cache to invalidate every data object in its object store in response to receiving an updated ISTag value from an ICAP server. Rather, the network cache invalidates data objects on an object-by-object basis after receiving the updated ISTag value. Specifically, the network cache invalidates a data object if the following conditions are satisfied: (1) the network cache has received an updated ISTag value, (2) the data object is requested by a client and (3) the requested data object requires transformation by the ICAP server. When each of these conditions is satisfied, the data object is invalidated and replaced with its transformed version. Because not every client-requested data object necessarily requires ICAP transformation after an updated ISTag value is received, the network cache may invalidate fewer data objects than in prior implementations.