A mechanism is provided in a virtual machine monitor for providing cache partitioning in virtualized environments. The mechanism assigns a virtual identification (ID) to each virtual machine in the virtualized environment. The processing core stores the virtual ID of the virtual machine in a special register. The mechanism also creates an entry for the virtual machine in a partition table. The mechanism may partition a shared cache using a vertical (way) partition and/or a horizontal partition. The entry in the partition table includes a vertical partition control and a horizontal partition control. For each cache access, the virtual machine passes the virtual ID along with the address to the shared cache. If the cache access results in a miss, the shared cache uses the partition table to select a victim cache line for replacement.