diff --git a/lib/setup.php b/lib/setup.php
index dfecd40dc49..fff6683b00d 100644
--- a/lib/setup.php
+++ b/lib/setup.php
@@ -44,6 +44,10 @@ global $CFG;
  * @global object(session) $SESSION
  */
 global $SESSION;
+/** 
+ * Definition of shared memory cache
+ */
+global $MCACHE;
 /**
  * Definition of course type
  * @global object(course) $COURSE
@@ -251,6 +255,12 @@ global $HTTPSPAGEREQUIRED;
     unset($originaldatabasedebug);
     error_reporting($CFG->debug);
 
+/// Shared-Memory cache init -- will set $MCACHE
+/// $MCACHE is a global object that offers at least add(), set() and delete()
+/// with similar semantics to the memcached PHP API http://php.net/memcache
+    if (!empty($CFG->memcached) && !empty($CFG->memcachedhosts)) {
+       init_memcached();
+    }
 
 /// Set a default enrolment configuration (see bug 1598)
     if (!isset($CFG->enrol)) {
diff --git a/lib/setuplib.php b/lib/setuplib.php
index ba4bfb9655e..d8e19a3bb13 100644
--- a/lib/setuplib.php
+++ b/lib/setuplib.php
@@ -209,4 +209,29 @@ function setup_is_unicodedb() {
     return $unicodedb;
 }
 
+function init_memcached() {
+    global $CFG, $MCACHE;
+
+    if (!function_exists('memcache_connect')) {
+        debugging("Memcached is set to true but the memcached extension is not installed");
+        return false;
+    }
+                                               
+    $hosts = split(',', $CFG->memcachedhosts);
+    $MCACHE = new Memcache;
+    if (count($hosts) === 1) {
+        // the faster pconnect is only available
+        // for single-server setups
+        $MCACHE->pconnect($hosts[0]);
+    } else {
+        // multi-host setup will share key space
+        foreach ($hosts as $host) {
+            $host = trim($host);
+            $MCACHE->addServer($host);
+        }
+    }
+
+    return true;
+}
+
 ?>