A system and method for application aware de-duplication (de-dup) of data blocks in a virtualized storage array is disclosed. In one embodiment, in a method of application aware de-dup of data blocks on virtualized storage arrays in a storage area network, a de-dup agent is enabled on each of one or more components of the storage area network. A master list of metadata associated with indexed data is then created and stored in the virtualized storage arrays. One or more sublists of metadata are then created from the masterlist and are stored. Upon receiving a write request from an application residing in the host device, it is determined whether data block being written has an entry in a sublist stored in a host device, and if so, the data block is then replaced with a pointer indicating where the data block is residing in the virtualized storage arrays.