diff --git a/mlx_lm/server.py b/mlx_lm/server.py
index ce8d95817..b9416ccf9 100644
--- a/mlx_lm/server.py
+++ b/mlx_lm/server.py
@@ -1740,7 +1740,7 @@ def run(
     handler_class=APIHandler,
 ):
     group = mx.distributed.init()
-    prompt_cache = LRUPromptCache(model_provider.cli_args.prompt_cache_size)
+    prompt_cache = make_lru_prompt_cache(model_provider.cli_args)
     response_generator = ResponseGenerator(model_provider, prompt_cache)
     if group.rank() == 0:
         _run_http_server(host, port, response_generator)
@@ -1748,6 +1748,13 @@ def run(
         response_generator.join()
 
 
+def make_lru_prompt_cache(args):
+    max_bytes = getattr(args, "prompt_cache_bytes", None)
+    if max_bytes is None:
+        max_bytes = 1 << 63
+    return LRUPromptCache(args.prompt_cache_size, max_bytes=max_bytes)
+
+
 def main():
     parser = argparse.ArgumentParser(description="MLX Http Server.")
     parser.add_argument(
diff --git a/tests/test_server.py b/tests/test_server.py
index 9a8a2ad14..c3a465ffa 100644
--- a/tests/test_server.py
+++ b/tests/test_server.py
@@ -17,6 +17,7 @@
     Response,
     ResponseGenerator,
     _process_control_tokens,
+    make_lru_prompt_cache,
 )
 from mlx_lm.utils import load
 
@@ -518,6 +519,19 @@ def keepalive_callback(processed_tokens, total_tokens):
 
 
 class TestLRUPromptCache(unittest.TestCase):
+    def test_server_prompt_cache_uses_byte_limit(self):
+        args = types.SimpleNamespace(prompt_cache_size=100, prompt_cache_bytes=10)
+        cache = make_lru_prompt_cache(args)
+        model = ("test", None, None)
+
+        cache.insert_cache(model, [1, 2], [MockCache("aaa")])
+        cache.insert_cache(model, [3, 4], [MockCache("bbb")])
+        cache.insert_cache(model, [4, 5], [MockCache("ccc")])
+        cache.insert_cache(model, [6, 7], [MockCache("ddd")])
+
+        self.assertEqual(len(cache), 3)
+        self.assertEqual(cache.nbytes, 9)
+
     def test_caching(self):
         cache = LRUPromptCache(max_size=10)