diff --git a/src/NATS.Server/Auth/Account.cs b/src/NATS.Server/Auth/Account.cs
index 5fed016..ea5cad8 100644
--- a/src/NATS.Server/Auth/Account.cs
+++ b/src/NATS.Server/Auth/Account.cs
@@ -152,6 +152,16 @@ public sealed class Account : IDisposable
         return true;
     }
 
+    // Generation ID for permission cache invalidation.
+    // Callers hold a per-client copy; when it diverges from GenerationId they must flush their caches.
+    // Reference: Go server/accounts.go — account generation tracking for permission invalidation.
+    private long _generationId;
+
+    public long GenerationId => Interlocked.Read(ref _generationId);
+
+    /// <summary>Increments the generation counter, signalling that permission caches are stale.</summary>
+    public void IncrementGeneration() => Interlocked.Increment(ref _generationId);
+
     // Slow consumer tracking
     // Go reference: server/client.go — handleSlowConsumer, markConnAsSlow, server/accounts.go slowConsumerCount
     private long _slowConsumerCount;
diff --git a/src/NATS.Server/Auth/PermissionLruCache.cs b/src/NATS.Server/Auth/PermissionLruCache.cs
index e0e5856..afd571b 100644
--- a/src/NATS.Server/Auth/PermissionLruCache.cs
+++ b/src/NATS.Server/Auth/PermissionLruCache.cs
@@ -1,7 +1,8 @@
 namespace NATS.Server.Auth;
 
 /// <summary>
-/// Fixed-capacity LRU cache for permission results.
+/// Fixed-capacity LRU cache for permission results, supporting both PUB and SUB entries
+/// with generation-based invalidation.
 /// Lock-protected (per-client, low contention).
 /// Reference: Go client.go maxPermCacheSize=128.
 /// </summary>
@@ -12,17 +13,51 @@ public sealed class PermissionLruCache
     private readonly LinkedList<(string Key, bool Value)> _list = new();
     private readonly object _lock = new();
 
+    // Generation tracking: _generation is the authoritative counter (bumped by Invalidate),
+    // _cacheGeneration is what the cache was last synced to. A mismatch on access triggers a clear.
+    private long _generation;
+    private long _cacheGeneration;
+
     public PermissionLruCache(int capacity = 128)
     {
         _capacity = capacity;
         _map = new Dictionary<string, LinkedListNode<(string Key, bool Value)>>(capacity, StringComparer.Ordinal);
     }
 
+    /// <summary>
+    /// The current generation counter. Incremented on each <see cref="Invalidate"/> call.
+    /// </summary>
+    public long Generation => Interlocked.Read(ref _generation);
+
+    /// <summary>
+    /// Bumps the generation counter so that the next TryGet or TryGetSub call detects
+    /// the staleness and clears all cached entries.
+    /// </summary>
+    public void Invalidate() => Interlocked.Increment(ref _generation);
+
+    // Ensures the cache is cleared if Invalidate was called since the last access.
+    // Must be called inside _lock.
+    private void EnsureFresh()
+    {
+        var gen = Interlocked.Read(ref _generation);
+        if (gen != _cacheGeneration)
+        {
+            _map.Clear();
+            _list.Clear();
+            _cacheGeneration = gen;
+        }
+    }
+
+    // ── PUB API (backward-compatible) ────────────────────────────────────────
+
+    /// <summary>Looks up a PUB permission for <paramref name="key"/>.</summary>
     public bool TryGet(string key, out bool value)
     {
+        var internalKey = "P:" + key;
         lock (_lock)
         {
-            if (_map.TryGetValue(key, out var node))
+            EnsureFresh();
+            if (_map.TryGetValue(internalKey, out var node))
             {
                 value = node.Value.Value;
                 _list.Remove(node);
@@ -35,6 +70,52 @@ public sealed class PermissionLruCache
         }
     }
 
+    /// <summary>Stores a PUB permission for <paramref name="key"/>.</summary>
+    public void Set(string key, bool value)
+    {
+        var internalKey = "P:" + key;
+        lock (_lock)
+        {
+            EnsureFresh();
+            SetInternal(internalKey, value);
+        }
+    }
+
+    // ── SUB API ───────────────────────────────────────────────────────────────
+
+    /// <summary>Looks up a SUB permission for <paramref name="subject"/>.</summary>
+    public bool TryGetSub(string subject, out bool value)
+    {
+        var internalKey = "S:" + subject;
+        lock (_lock)
+        {
+            EnsureFresh();
+            if (_map.TryGetValue(internalKey, out var node))
+            {
+                value = node.Value.Value;
+                _list.Remove(node);
+                _list.AddFirst(node);
+                return true;
+            }
+
+            value = default;
+            return false;
+        }
+    }
+
+    /// <summary>Stores a SUB permission for <paramref name="subject"/>.</summary>
+    public void SetSub(string subject, bool allowed)
+    {
+        var internalKey = "S:" + subject;
+        lock (_lock)
+        {
+            EnsureFresh();
+            SetInternal(internalKey, allowed);
+        }
+    }
+
+    // ── Shared ────────────────────────────────────────────────────────────────
+
     public int Count
     {
         get
@@ -46,28 +127,26 @@ public sealed class PermissionLruCache
         }
     }
 
-    public void Set(string key, bool value)
+    // Must be called inside _lock.
+    private void SetInternal(string internalKey, bool value)
     {
-        lock (_lock)
+        if (_map.TryGetValue(internalKey, out var existing))
         {
-            if (_map.TryGetValue(key, out var existing))
-            {
-                _list.Remove(existing);
-                existing.Value = (key, value);
-                _list.AddFirst(existing);
-                return;
-            }
-
-            if (_map.Count >= _capacity)
-            {
-                var last = _list.Last!;
-                _map.Remove(last.Value.Key);
-                _list.RemoveLast();
-            }
-
-            var node = new LinkedListNode<(string Key, bool Value)>((key, value));
-            _list.AddFirst(node);
-            _map[key] = node;
+            _list.Remove(existing);
+            existing.Value = (internalKey, value);
+            _list.AddFirst(existing);
+            return;
         }
+
+        if (_map.Count >= _capacity)
+        {
+            var last = _list.Last!;
+            _map.Remove(last.Value.Key);
+            _list.RemoveLast();
+        }
+
+        var node = new LinkedListNode<(string Key, bool Value)>((internalKey, value));
+        _list.AddFirst(node);
+        _map[internalKey] = node;
     }
 }
diff --git a/tests/NATS.Server.Tests/Auth/SubPermissionCacheTests.cs b/tests/NATS.Server.Tests/Auth/SubPermissionCacheTests.cs
new file mode 100644
index 0000000..e526184
--- /dev/null
+++ b/tests/NATS.Server.Tests/Auth/SubPermissionCacheTests.cs
@@ -0,0 +1,161 @@
+using NATS.Server.Auth;
+using Shouldly;
+
+namespace NATS.Server.Tests.Auth;
+
+/// <summary>
+/// Tests for SUB permission caching and generation-based invalidation.
+/// Reference: Go server/client.go — subPermCache, pubPermCache, perm cache invalidation on account update.
+/// </summary>
+public sealed class SubPermissionCacheTests
+{
+    // ── SUB API ───────────────────────────────────────────────────────────────
+
+    [Fact]
+    public void SetSub_and_TryGetSub_round_trips()
+    {
+        var cache = new PermissionLruCache();
+
+        cache.SetSub("foo.bar", true);
+
+        cache.TryGetSub("foo.bar", out var result).ShouldBeTrue();
+        result.ShouldBeTrue();
+    }
+
+    [Fact]
+    public void TryGetSub_returns_false_for_unknown()
+    {
+        var cache = new PermissionLruCache();
+
+        cache.TryGetSub("unknown.subject", out var result).ShouldBeFalse();
+        result.ShouldBeFalse();
+    }
+
+    [Fact]
+    public void PUB_and_SUB_stored_independently()
+    {
+        var cache = new PermissionLruCache();
+
+        // Same logical subject, different PUB/SUB outcomes
+        cache.Set("orders.>", false);   // PUB denied
+        cache.SetSub("orders.>", true); // SUB allowed
+
+        cache.TryGet("orders.>", out var pubAllowed).ShouldBeTrue();
+        pubAllowed.ShouldBeFalse();
+
+        cache.TryGetSub("orders.>", out var subAllowed).ShouldBeTrue();
+        subAllowed.ShouldBeTrue();
+    }
+
+    // ── Invalidation ─────────────────────────────────────────────────────────
+
+    [Fact]
+    public void Invalidate_clears_on_next_access()
+    {
+        var cache = new PermissionLruCache();
+
+        cache.Set("pub.subject", true);
+        cache.SetSub("sub.subject", true);
+
+        cache.Invalidate();
+
+        // Both PUB and SUB lookups should miss after invalidation
+        cache.TryGet("pub.subject", out _).ShouldBeFalse();
+        cache.TryGetSub("sub.subject", out _).ShouldBeFalse();
+    }
+
+    [Fact]
+    public void Generation_increments_on_invalidate()
+    {
+        var cache = new PermissionLruCache();
+
+        var before = cache.Generation;
+        cache.Invalidate();
+        var afterOne = cache.Generation;
+        cache.Invalidate();
+        var afterTwo = cache.Generation;
+
+        afterOne.ShouldBe(before + 1);
+        afterTwo.ShouldBe(before + 2);
+    }
+
+    // ── LRU eviction ─────────────────────────────────────────────────────────
+
+    [Fact]
+    public void LRU_eviction_applies_to_SUB_entries()
+    {
+        // capacity = 4: fill with 4 SUB entries then add a 5th; the oldest should be evicted
+        var cache = new PermissionLruCache(capacity: 4);
+
+        cache.SetSub("a", true);
+        cache.SetSub("b", true);
+        cache.SetSub("c", true);
+        cache.SetSub("d", true);
+
+        // Touch "a" so it becomes MRU; "b" becomes LRU
+        cache.TryGetSub("a", out _);
+
+        // Adding "e" should evict "b" (LRU)
+        cache.SetSub("e", true);
+
+        cache.Count.ShouldBe(4);
+        cache.TryGetSub("b", out _).ShouldBeFalse("b should have been evicted");
+        cache.TryGetSub("e", out _).ShouldBeTrue("e was just added");
+    }
+
+    // ── Backward compatibility ────────────────────────────────────────────────
+
+    [Fact]
+    public void Existing_PUB_API_still_works()
+    {
+        var cache = new PermissionLruCache();
+
+        cache.Set("pub.only", true);
+
+        cache.TryGet("pub.only", out var value).ShouldBeTrue();
+        value.ShouldBeTrue();
+
+        // Overwrite with false
+        cache.Set("pub.only", false);
+        cache.TryGet("pub.only", out value).ShouldBeTrue();
+        value.ShouldBeFalse();
+    }
+
+    // ── Account.GenerationId ──────────────────────────────────────────────────
+
+    [Fact]
+    public void Account_GenerationId_starts_at_zero()
+    {
+        var account = new Account("test");
+
+        account.GenerationId.ShouldBe(0L);
+    }
+
+    [Fact]
+    public void Account_IncrementGeneration_increments()
+    {
+        var account = new Account("test");
+
+        account.IncrementGeneration();
+        account.GenerationId.ShouldBe(1L);
+
+        account.IncrementGeneration();
+        account.GenerationId.ShouldBe(2L);
+    }
+
+    // ── Mixed PUB + SUB count ─────────────────────────────────────────────────
+
+    [Fact]
+    public void Mixed_PUB_SUB_count_includes_both()
+    {
+        var cache = new PermissionLruCache();
+
+        cache.Set("pub.a", true);
+        cache.Set("pub.b", false);
+        cache.SetSub("sub.a", true);
+        cache.SetSub("sub.b", false);
+
+        // All four entries (stored under different internal keys) contribute to Count
+        cache.Count.ShouldBe(4);
+    }
+}