Embodiments of the present invention and provide a method for distributed virtual machine (VM) image management in a cloud computing management includes receiving in a hypervisor executing in memory of a host computer, a request for VM image data from a VM and determining whether or not the requested VM image data is present in a local cache of either the hypervisor of the host computer or in a cache of a hypervisor of a peer host. The method additionally includes retrieving the requested VM image data from a seed image in a remote data store in the cloud computing environment only when it is determined that the VM image data neither is present in the local cache of the hypervisor of the host computer nor is present in the cache of the hypervisor of the peer host.