diff --git a/.vscode/launch.json b/.vscode/launch.json
index 4053025f1..024ad291d 100644
--- a/.vscode/launch.json
+++ b/.vscode/launch.json
@@ -3,14 +3,12 @@
 	// Hover to view descriptions of existing attributes.
 	// For more information, visit: https://go.microsoft.com/fwlink/?linkid=830387
 	"version": "0.2.0",
-	"configurations": [
-	  {
+	"configurations": [{
 		"type": "java",
-		"name": "Debug (Attach)",
+		"name": "Debug (Attach) - Remote",
 		"request": "attach",
 		"hostName": "localhost",
 		"port": 1054,
 		"projectName": "org.eclipse.lsp4xml"
-	  }
-	]
-  }
\ No newline at end of file
+	}]
+}
\ No newline at end of file
diff --git a/org.eclipse.lsp4xml/pom.xml b/org.eclipse.lsp4xml/pom.xml
index 4c3d32771..c6e2d421d 100644
--- a/org.eclipse.lsp4xml/pom.xml
+++ b/org.eclipse.lsp4xml/pom.xml
@@ -69,6 +69,11 @@
 		</plugins>
 	</build>
 	<dependencies>
+		<dependency>
+			<groupId>com.google.guava</groupId>
+			<artifactId>guava</artifactId>
+			<version>27.0.1-jre</version>
+		</dependency>
 		<dependency>
 			<groupId>com.google.code.gson</groupId>
 			<artifactId>gson</artifactId>
@@ -76,6 +81,12 @@
 		<dependency>
 			<groupId>org.eclipse.lsp4j</groupId>
 			<artifactId>org.eclipse.lsp4j</artifactId>
+			<exclusions>
+				<exclusion>
+					<groupId>com.google.guava</groupId>
+					<artifactId>guava</artifactId>
+				</exclusion>
+			</exclusions>
 		</dependency>
 		<dependency>
 			<groupId>org.eclipse.lsp4j</groupId>
@@ -102,5 +113,11 @@
 			<artifactId>junit</artifactId>
 			<scope>test</scope>
 		</dependency>
+		<dependency>
+			<groupId>org.eclipse.jetty</groupId>
+			<artifactId>jetty-server</artifactId>
+			<version>9.4.14.v20181114</version>
+			<scope>test</scope>
+		</dependency>
 	</dependencies>
 </project>
\ No newline at end of file
diff --git a/org.eclipse.lsp4xml/src/main/java/org/eclipse/lsp4xml/uriresolver/CacheResourcesManager.java b/org.eclipse.lsp4xml/src/main/java/org/eclipse/lsp4xml/uriresolver/CacheResourcesManager.java
index bfa541e9e..734cd1143 100644
--- a/org.eclipse.lsp4xml/src/main/java/org/eclipse/lsp4xml/uriresolver/CacheResourcesManager.java
+++ b/org.eclipse.lsp4xml/src/main/java/org/eclipse/lsp4xml/uriresolver/CacheResourcesManager.java
@@ -27,9 +27,14 @@
 import java.util.HashMap;
 import java.util.Map;
 import java.util.concurrent.CompletableFuture;
+import java.util.concurrent.TimeUnit;
 import java.util.logging.Level;
 import java.util.logging.Logger;
 
+import com.google.common.cache.Cache;
+import com.google.common.cache.CacheBuilder;
+
+
 import org.eclipse.lsp4xml.utils.FilesUtils;
 import org.eclipse.lsp4xml.utils.URIUtils;
 
@@ -38,6 +43,7 @@
  *
  */
 public class CacheResourcesManager {
+	protected final Cache<String, Boolean> unavailableURICache;
 
 	private static final String CACHE_PATH = "cache";
 	private static final Logger LOGGER = Logger.getLogger(CacheResourcesManager.class.getName());
@@ -79,7 +85,12 @@ public String getResourceFromClasspath() {
 	}
 
 	public CacheResourcesManager() {
+		this(CacheBuilder.newBuilder().maximumSize(100).expireAfterWrite(30, TimeUnit.SECONDS).build());
+	}
+
+	public CacheResourcesManager(Cache<String, Boolean> cache) {
 		resourcesLoading = new HashMap<>();
+		unavailableURICache = cache;
 	}
 
 	public Path getResource(final String resourceURI) throws IOException {
@@ -87,6 +98,12 @@ public Path getResource(final String resourceURI) throws IOException {
 		if (Files.exists(resourceCachePath)) {
 			return resourceCachePath;
 		}
+
+		if(unavailableURICache.getIfPresent(resourceURI) != null) {
+			LOGGER.info("Ignored unavailable schema URI: " + resourceURI + "\n");
+			return null;
+		}
+
 		CompletableFuture<Path> f = null;
 		synchronized (resourcesLoading) {
 			if (resourcesLoading.containsKey(resourceURI)) {
@@ -139,11 +156,12 @@ private CompletableFuture<Path> downloadResource(final String resourceURI, Path
 				LOGGER.info("Downloaded " + resourceURI + " to " + resourceCachePath + " in " + elapsed + "ms");
 			} catch (Exception e) {
 				// Do nothing
+				unavailableURICache.put(resourceURI, true);
 				Throwable rootCause = getRootCause(e);
 				String error = "[" + rootCause.getClass().getTypeName() + "] " + rootCause.getMessage();
 				LOGGER.log(Level.SEVERE,
 						"Error while downloading " + resourceURI + " to " + resourceCachePath + " : " + error);
-				throw new CacheResourceDownloadedException("Error while downloading '" + resourceURI + "'.", e);
+				throw new CacheResourceDownloadedException("Error while downloading '" + resourceURI + "' to " + resourceCachePath + ".", e);
 			} finally {
 				synchronized (resourcesLoading) {
 					resourcesLoading.remove(resourceURI);
diff --git a/org.eclipse.lsp4xml/src/main/java/org/eclipse/lsp4xml/utils/FilesUtils.java b/org.eclipse.lsp4xml/src/main/java/org/eclipse/lsp4xml/utils/FilesUtils.java
index 1d906cd94..28468efb6 100644
--- a/org.eclipse.lsp4xml/src/main/java/org/eclipse/lsp4xml/utils/FilesUtils.java
+++ b/org.eclipse.lsp4xml/src/main/java/org/eclipse/lsp4xml/utils/FilesUtils.java
@@ -19,18 +19,37 @@
 import java.nio.file.Paths;
 import java.util.Scanner;
 
+import com.google.common.base.Supplier;
+import com.google.common.base.Suppliers;
+
 /**
  * Files utilities.
  *
  */
 public class FilesUtils {
 
-	private FilesUtils(){}
+	public static final String LSP4XML_WORKDIR_KEY = "lsp4xml.workdir";
+
+	private FilesUtils() {
+	}
 
-	private static final Path DEPLOYED_BASE_PATH = getDeployedBasePath();
+	public static Supplier<Path> DEPLOYED_BASE_PATH;
+
+	static {
+		resetDeployPath();
+	}
+
+	/** Public for test purposes */
+	public static void resetDeployPath() {
+		DEPLOYED_BASE_PATH = Suppliers.memoize(() -> getDeployedBasePath());
+	}
 
 	private static Path getDeployedBasePath() {
-		String dir = System.getProperty("user.home");
+		String dir = System.getProperty(LSP4XML_WORKDIR_KEY);
+		if (dir != null) {
+			return Paths.get(dir);
+		}
+		dir = System.getProperty("user.home");
 		if (dir == null) {
 			dir = System.getProperty("user.dir");
 		}
@@ -48,7 +67,7 @@ private static Path getDeployedBasePath() {
 	 * @throws IOException
 	 */
 	public static Path getDeployedPath(Path path) throws IOException {
-		return DEPLOYED_BASE_PATH.resolve(path);
+		return DEPLOYED_BASE_PATH.get().resolve(path);
 	}
 
 	/**
@@ -86,5 +105,4 @@ static String toString(InputStream is) {
 			return s.hasNext() ? s.next() : "";
 		}
 	}
-
 }
diff --git a/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/AbstractCacheBasedTest.java b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/AbstractCacheBasedTest.java
new file mode 100644
index 000000000..85feda9df
--- /dev/null
+++ b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/AbstractCacheBasedTest.java
@@ -0,0 +1,45 @@
+/*******************************************************************************
+* Copyright (c) 2019 Red Hat Inc. and others.
+* All rights reserved. This program and the accompanying materials
+* which accompanies this distribution, and is available at
+* http://www.eclipse.org/legal/epl-v20.html
+*
+* Contributors:
+*     Red Hat Inc. - initial API and implementation
+*******************************************************************************/
+package org.eclipse.lsp4xml;
+
+import java.io.IOException;
+import java.nio.file.Files;
+import java.nio.file.Path;
+
+import com.google.common.io.MoreFiles;
+import com.google.common.io.RecursiveDeleteOption;
+
+import org.eclipse.lsp4xml.utils.FilesUtils;
+import org.eclipse.lsp4xml.utils.ProjectUtils;
+import org.junit.After;
+import org.junit.Before;
+
+/**
+ * AbstractCacheBasedTest
+ */
+public abstract class AbstractCacheBasedTest {
+
+	protected static Path TEST_WORK_DIRECTORY = ProjectUtils.getProjectDirectory().resolve("target/test-cache");
+
+	@Before
+	public final void setupCache() throws Exception {
+		clearCache();
+		System.setProperty(FilesUtils.LSP4XML_WORKDIR_KEY, TEST_WORK_DIRECTORY.toAbsolutePath().toString());
+	}
+
+	@After
+	public final void clearCache() throws IOException {
+		if (Files.exists(TEST_WORK_DIRECTORY)) {
+			MoreFiles.deleteDirectoryContents(TEST_WORK_DIRECTORY,RecursiveDeleteOption.ALLOW_INSECURE);
+		}
+		System.clearProperty(FilesUtils.LSP4XML_WORKDIR_KEY);
+		FilesUtils.resetDeployPath();
+	}
+}
\ No newline at end of file
diff --git a/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/extensions/contentmodel/XMLSchemaPublishDiagnosticsTest.java b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/extensions/contentmodel/XMLSchemaPublishDiagnosticsTest.java
index b3036eba6..a8a31cf26 100644
--- a/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/extensions/contentmodel/XMLSchemaPublishDiagnosticsTest.java
+++ b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/extensions/contentmodel/XMLSchemaPublishDiagnosticsTest.java
@@ -17,6 +17,7 @@
 
 import org.eclipse.lsp4j.Diagnostic;
 import org.eclipse.lsp4j.DiagnosticSeverity;
+import org.eclipse.lsp4xml.AbstractCacheBasedTest;
 import org.eclipse.lsp4xml.XMLAssert;
 import org.eclipse.lsp4xml.extensions.contentmodel.model.ContentModelManager;
 import org.eclipse.lsp4xml.extensions.contentmodel.participants.XMLSchemaErrorCode;
@@ -27,7 +28,7 @@
  * Test with published diagnostics.
  *
  */
-public class XMLSchemaPublishDiagnosticsTest {
+public class XMLSchemaPublishDiagnosticsTest extends AbstractCacheBasedTest {
 
 	@Test
 	public void schemaWithUrlWithoutCache() throws Exception {
@@ -77,11 +78,13 @@ public void schemaWithUrlWithCache() throws Exception {
 				" xsi:noNamespaceSchemaLocation=\"http://invoice.xsd\">\r\n" + //
 				"</invoice> \r\n" + //
 				"";
+
+		String expectedLocation = TEST_WORK_DIRECTORY.resolve("cache/http/invoice.xsd").toString();
 		XMLAssert.testPublishDiagnosticsFor(xml, fileURI, configuration,
 				pd(fileURI,
 						new Diagnostic(r(1, 1, 1, 8), "The resource 'http://invoice.xsd' is downloading.",
 								DiagnosticSeverity.Information, "XML")),
-				pd(fileURI, new Diagnostic(r(1, 1, 1, 8), "Error while downloading 'http://invoice.xsd'.",
+				pd(fileURI, new Diagnostic(r(1, 1, 1, 8), "Error while downloading 'http://invoice.xsd' to "+expectedLocation+".",
 						DiagnosticSeverity.Error, "XML")));
 	}
 
diff --git a/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/uriresolver/CacheResourcesManagerTest.java b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/uriresolver/CacheResourcesManagerTest.java
index 28437b4e1..689bd43e5 100644
--- a/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/uriresolver/CacheResourcesManagerTest.java
+++ b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/uriresolver/CacheResourcesManagerTest.java
@@ -12,10 +12,39 @@
 
 import static org.junit.Assert.assertEquals;
 import static org.junit.Assert.assertFalse;
+import static org.junit.Assert.assertNotNull;
+import static org.junit.Assert.assertNull;
+import static org.junit.Assert.fail;
 
+import java.util.concurrent.TimeUnit;
+
+import com.google.common.cache.Cache;
+import com.google.common.cache.CacheBuilder;
+
+import org.eclipse.lsp4xml.AbstractCacheBasedTest;
+import org.junit.After;
+import org.junit.Before;
 import org.junit.Test;
 
-public class CacheResourcesManagerTest {
+public class CacheResourcesManagerTest extends AbstractCacheBasedTest {
+
+	private CacheResourcesManager cacheResourcesManager;
+
+	private FileServer server;
+
+	
+	@Before
+	public void setup() throws Exception {
+		cacheResourcesManager = new CacheResourcesManager(testingCache());
+		cacheResourcesManager.setUseCache(true);
+	}
+
+	@After
+	public void stopServer() throws Exception {
+		if (server != null) {
+			server.stop();
+		}
+	}
 
 	@Test
 	public void testCanUseCache() {
@@ -24,7 +53,6 @@ public void testCanUseCache() {
 	}
 
 	private void testCanUseCache(boolean useCacheEnabled) {
-		CacheResourcesManager cacheResourcesManager = new CacheResourcesManager();
 		cacheResourcesManager.setUseCache(useCacheEnabled);
 		assertEquals(useCacheEnabled, cacheResourcesManager.canUseCache("http://foo"));
 		assertEquals(useCacheEnabled, cacheResourcesManager.canUseCache("ftp://foo"));
@@ -32,4 +60,53 @@ private void testCanUseCache(boolean useCacheEnabled) {
 		assertFalse(cacheResourcesManager.canUseCache("file:///foo"));
 	}
 
+	@Test
+	public void testUnavailableCache() throws Exception {
+		FileServer server = new FileServer();
+		server.start();
+		String uri = server.getUri("bad/url");
+		try {
+			cacheResourcesManager.getResource(uri);
+			fail("cacheResourcesManager should be busy downloading the url");
+		} catch (CacheResourceDownloadingException ignored) {
+		}
+		TimeUnit.MILLISECONDS.sleep(200);
+		//failed to download so returns null
+		assertNull(cacheResourcesManager.getResource(uri));
+
+		TimeUnit.SECONDS.sleep(1);//wait past the cache expiration date
+
+		//Manager should retry downloading
+		try {
+			cacheResourcesManager.getResource(uri);
+			fail("cacheResourcesManager should be busy re-downloading the url");
+		} catch (CacheResourceDownloadingException ignored) {
+		}
+	}
+
+	@Test
+	public void testAvailableCache() throws Exception {
+		FileServer server = new FileServer();
+		server.start();
+		String uri = server.getUri("/dtd/web-app_2_3.dtd");
+		try {
+			cacheResourcesManager.getResource(uri);
+			fail("cacheResourcesManager should be busy downloading the url");
+		} catch (CacheResourceDownloadingException ignored) {
+		}
+		TimeUnit.MILLISECONDS.sleep(200);
+
+		assertNotNull(cacheResourcesManager.getResource(uri));
+
+		server.stop();
+		TimeUnit.SECONDS.sleep(1);//wait past the cache expiration date
+
+		//Manager should return cached content, even if server is offline
+		assertNotNull(cacheResourcesManager.getResource(uri));
+	}
+
+	private Cache<String, Boolean> testingCache() {
+		return CacheBuilder.newBuilder().expireAfterWrite(1, TimeUnit.SECONDS).maximumSize(1).build();
+	}
+
 }
\ No newline at end of file
diff --git a/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/uriresolver/FileServer.java b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/uriresolver/FileServer.java
new file mode 100644
index 000000000..b00699c8f
--- /dev/null
+++ b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/uriresolver/FileServer.java
@@ -0,0 +1,93 @@
+/*******************************************************************************
+* Copyright (c) 2019 Red Hat Inc. and others.
+* All rights reserved. This program and the accompanying materials
+* which accompanies this distribution, and is available at
+* http://www.eclipse.org/legal/epl-v20.html
+*
+* Contributors:
+*     Red Hat Inc. - initial API and implementation
+*******************************************************************************/
+
+package org.eclipse.lsp4xml.uriresolver;
+
+import java.io.IOException;
+import java.nio.file.Path;
+import java.util.logging.Logger;
+
+import org.eclipse.jetty.server.Handler;
+import org.eclipse.jetty.server.Server;
+import org.eclipse.jetty.server.ServerConnector;
+import org.eclipse.jetty.server.handler.DefaultHandler;
+import org.eclipse.jetty.server.handler.HandlerList;
+import org.eclipse.jetty.server.handler.ResourceHandler;
+import org.eclipse.lsp4xml.utils.ProjectUtils;
+
+/**
+ * Test server
+ */
+public class FileServer {
+
+	private static Logger LOG = Logger.getLogger(FileServer.class.getName());
+
+	private Server server;
+
+	/**
+	 * Creates an http server on a random port, serving the
+	 * <code>src/test/resources</code> directory.
+	 * 
+	 * @throws IOException
+	 */
+	public FileServer() throws IOException {
+		this("src/test/resources");
+	}
+
+	/**
+	 * Creates an http server on a random port, serving the <code>dir</code>
+	 * directory (relative to the current project).
+	 * 
+	 * @param dir
+	 * @throws IOException
+	 */
+	public FileServer(String dir) throws IOException {
+		server = new Server(0);
+		ResourceHandler resourceHandler = new ResourceHandler();
+		Path base = ProjectUtils.getProjectDirectory().resolve(dir);
+		resourceHandler.setResourceBase(base.toUri().toString());
+		resourceHandler.setDirectoriesListed(true);
+        HandlerList handlers = new HandlerList();
+        handlers.setHandlers(new Handler[] { resourceHandler, new DefaultHandler() });
+        server.setHandler(handlers);
+	}
+
+	/**
+	 * @return the port the server was started on.
+	 * @throws Exception
+	 */
+	public int start() throws Exception {
+		if (!server.isStarting() && !server.isStarted() && !server.isRunning()) {
+			server.start();
+		}
+		int port = getPort();
+		LOG.info("http server started on port "+ port);
+		return port;
+	}
+
+	public int getPort() {
+		return ((ServerConnector)server.getConnectors()[0]).getLocalPort();
+	}
+
+	public void stop() throws Exception {
+		server.stop();
+	}
+	
+	public String getUri(String resourcePath) {
+		StringBuilder sb = new StringBuilder("http://localhost:")
+		.append(getPort());
+		if (!resourcePath.startsWith("/")) {
+			sb.append("/");
+		}
+		sb.append(resourcePath);
+		LOG.info("remote uri : "+sb.toString());
+		return sb.toString();
+	}
+}
\ No newline at end of file
diff --git a/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/utils/ProjectUtils.java b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/utils/ProjectUtils.java
new file mode 100644
index 000000000..d4110863c
--- /dev/null
+++ b/org.eclipse.lsp4xml/src/test/java/org/eclipse/lsp4xml/utils/ProjectUtils.java
@@ -0,0 +1,34 @@
+/*******************************************************************************
+* Copyright (c) 2019 Red Hat Inc. and others.
+* All rights reserved. This program and the accompanying materials
+* which accompanies this distribution, and is available at
+* http://www.eclipse.org/legal/epl-v20.html
+*
+* Contributors:
+*     Red Hat Inc. - initial API and implementation
+*******************************************************************************/
+
+package org.eclipse.lsp4xml.utils;
+
+import java.nio.file.Files;
+import java.nio.file.Path;
+import java.nio.file.Paths;
+
+/**
+ * ProjectUtils
+ */
+public class ProjectUtils {
+
+	/**
+	 * @return the current lsp4xml project directory
+	 */
+	public static Path getProjectDirectory() {
+		String currPath = ProjectUtils.class.getClassLoader().getResource("").getFile();
+		Path dir = Paths.get(currPath);
+		while (!Files.exists(dir.resolve("pom.xml")) && dir.getParent() != null) {
+			dir = dir.getParent();
+		}
+		return dir;
+	}
+	
+}
\ No newline at end of file