diff --git a/openhands/core/message_utils.py b/openhands/core/message_utils.py
index 25be12873177..7683c7c4453c 100644
--- a/openhands/core/message_utils.py
+++ b/openhands/core/message_utils.py
@@ -351,17 +351,14 @@ def get_observation_message(
 
 
 def apply_prompt_caching(messages: list[Message]) -> None:
-    """Applies caching breakpoints to the messages."""
+    """Applies caching breakpoints to the messages.
+
+    For new Anthropic API, we only need to mark the last user or tool message as cacheable.
+    """
     # NOTE: this is only needed for anthropic
-    # following logic here:
-    # https://github.com/anthropics/anthropic-quickstarts/blob/8f734fd08c425c6ec91ddd613af04ff87d70c5a0/computer-use-demo/computer_use_demo/loop.py#L241-L262
-    breakpoints_remaining = 3  # remaining 1 for system/tool
     for message in reversed(messages):
         if message.role in ('user', 'tool'):
-            if breakpoints_remaining > 0:
-                message.content[
-                    -1
-                ].cache_prompt = True  # Last item inside the message content
-                breakpoints_remaining -= 1
-            else:
-                break
+            message.content[
+                -1
+            ].cache_prompt = True  # Last item inside the message content
+            break
diff --git a/tests/unit/test_prompt_caching.py b/tests/unit/test_prompt_caching.py
index 3258fa486a9f..2e149c1a37fd 100644
--- a/tests/unit/test_prompt_caching.py
+++ b/tests/unit/test_prompt_caching.py
@@ -84,12 +84,12 @@ def test_get_messages(codeact_agent: CodeActAgent):
     assert messages[0].content[0].cache_prompt  # system message
     assert messages[1].role == 'user'
     assert messages[1].content[0].text.endswith('Initial user message')
-    # we add cache breakpoint to the last 3 user messages
-    assert messages[1].content[0].cache_prompt
+    # we add cache breakpoint to only the last user message
+    assert not messages[1].content[0].cache_prompt
 
     assert messages[3].role == 'user'
     assert messages[3].content[0].text == ('Hello, agent!')
-    assert messages[3].content[0].cache_prompt
+    assert not messages[3].content[0].cache_prompt
     assert messages[4].role == 'assistant'
     assert messages[4].content[0].text == 'Hello, user!'
     assert not messages[4].content[0].cache_prompt
@@ -121,10 +121,9 @@ def test_get_messages_prompt_caching(codeact_agent: CodeActAgent):
         if msg.role in ('user', 'system') and msg.content[0].cache_prompt
     ]
     assert (
-        len(cached_user_messages) == 4
-    )  # Including the initial system+user + 2 last user message
+        len(cached_user_messages) == 2
+    )  # Including the initial system+user + last user message
 
-    # Verify that these are indeed the last two user messages (from start)
+    # Verify that these are indeed the last user message (from start)
     assert cached_user_messages[0].content[0].text.startswith('You are OpenHands agent')
-    assert cached_user_messages[2].content[0].text.startswith('User message 1')
-    assert cached_user_messages[3].content[0].text.startswith('User message 1')
+    assert cached_user_messages[1].content[0].text.startswith('User message 14')