Data Deduplication describes approach that reduces the storage capacity needed to store data or the data has to be transfer on the network. Cloud storage has received increasing attention from industry as it offers infinite storage resources that are available on demand. Source Deduplication is useful in cloud backup that saves network bandwidth and reduces network space Deduplication is the process by breaking up an incoming stream into relatively large segments and deduplicating each segment against only a few of the most similar previous segments. To identify similar segments use block index technique The problem is that these schemes traditionally require a full chunk index, which indexes every chunk, in order to determine which chunks have already been stored unfortunately, it is impractical to keep such an index in RAM and a disk based index with one seek per incoming chunk is far too slow. In this paper we describes application based deduplication approach and indexing scheme contains block that preserved caching which maintains the locality of the fingerprint of duplicate content to achieve high hit ratio and to overcome the lookup performance and reduced cost for cloud backup services and increase dedulpication efficiency. KEYWORDS:Backup services, Caching, Data deduplication. I.INTRODUCTIONThe explosive growth of the digital data, data deduplication has gained increasing attention for its storage efficiency in backup storage systems. Today, in the context of user data sharing platforms the challenges for large scale, highly redundant internet data storage is high. Due to this redundancy storage cost is reduces. Storage for this increasingly centralized Web data can be getting by its de duplication. Data deduplication describes a class of approaches that reduce the storage capacity needed to store data or the amount of data that has to be transferred over a network. These approaches detect coarse-grained redundancies within a data set, e.g. a file system; Data deduplication not only reduces the storage space requirements by eliminating redundant data but also minimizes the network transmission of duplicate data in the network storage systems. It splits files into multiple chunks that are each uniquely identified by a hash signature called a fingerprint. It removes duplicate chunks by checking their fingerprints, which avoids byte by byte comparisons. Mainly data deduplication focused on different terms like throughput, advance chunking schemes, other type of storage capacity and clustering method and system workload.As data passes through a cache on its way to or from the storage/processing/networking device, some of the data is selectively stored in the cache. When an application or process later accesses data stored in the cache that request can be served faster from the cache than from the slower device. The more requests that can be served from cache, the faster is the overall system performance. There is a trade-off in cache cost and performance. Larger caches yield a higher cache hit rat...