diff --git a/graphify/watch.py b/graphify/watch.py
index 59613b627..f5de8c6dd 100644
--- a/graphify/watch.py
+++ b/graphify/watch.py
@@ -440,6 +440,8 @@ class _StoredSourcePaths:
         self.watch_root = watch_root
         self._normalize_source = normalize_source
         self.existing_source_root = project_root
+        self._identity_cache: dict[str, str | None] = {}
+        self._in_watch_root_cache: dict[str, bool] = {}
         relative_marker_prefix: str | None = None
 
         root_marker = out / ".graphify_root"
@@ -539,14 +541,33 @@ class _StoredSourcePaths:
         return Path(os.path.abspath(source_path)).as_posix()
 
     def identity(self, source_file: str | None) -> str | None:
+        # Every node, edge and hyperedge asks for its file's identity, several
+        # times per item, but a graph has far fewer distinct source files than
+        # items. The answer depends only on ``source_file`` and roots fixed in
+        # __init__, so compute it once per file instead of rebuilding Path
+        # objects (and an abspath) on every call.
+        if not isinstance(source_file, str):
+            return self._identity_uncached(source_file)
+        try:
+            return self._identity_cache[source_file]
+        except KeyError:
+            identity = self._identity_cache[source_file] = self._identity_uncached(source_file)
+            return identity
+
+    def _identity_uncached(self, source_file: str | None) -> str | None:
         normalized = self._normalize_source(source_file)
         if normalized and not Path(normalized).is_absolute() and self.legacy_watch_relative:
             return self.absolute_identity(normalized, self.watch_root)
         return self.absolute_identity(normalized, self.existing_source_root)
 
     def in_watch_root(self, source_file: str | None) -> bool:
+        if isinstance(source_file, str) and source_file in self._in_watch_root_cache:
+            return self._in_watch_root_cache[source_file]
         identity = self.identity(source_file)
-        return bool(identity) and _is_relative_to(Path(identity), self.watch_root)
+        inside = bool(identity) and _is_relative_to(Path(identity), self.watch_root)
+        if isinstance(source_file, str):
+            self._in_watch_root_cache[source_file] = inside
+        return inside
 
     def is_evicted(self, item: dict, identities: set[str]) -> bool:
         return self.identity(item.get("source_file")) in identities
diff --git a/tests/test_watch_identity_cache.py b/tests/test_watch_identity_cache.py
new file mode 100644
index 000000000..be3eae4a9
--- /dev/null
+++ b/tests/test_watch_identity_cache.py
@@ -0,0 +1,59 @@
+"""`_StoredSourcePaths.identity` is asked for every node, edge and hyperedge's
+file, several times per item, during an update's reconcile pass. A graph has
+far fewer distinct source files than items (graphify's own repo: ~1k files,
+~18.7k nodes, ~38k edges, ~150k identity calls), and the answer depends only on
+the stored path and roots fixed in __init__. It is computed once per file.
+"""
+from __future__ import annotations
+
+from pathlib import Path
+
+from graphify.build import _norm_source_file
+from graphify.watch import _StoredSourcePaths
+
+
+def _paths(tmp_path: Path, normalize=_norm_source_file) -> _StoredSourcePaths:
+    out = tmp_path / "graphify-out"
+    out.mkdir()
+    return _StoredSourcePaths(
+        {"nodes": [], "links": []},
+        out=out,
+        project_root=tmp_path,
+        watch_root=tmp_path,
+        normalize_source=normalize,
+    )
+
+
+def test_identity_is_computed_once_per_source_file(tmp_path):
+    calls: list[str | None] = []
+
+    def counting_normalize(p, root=None):
+        calls.append(p)
+        return _norm_source_file(p, root)
+
+    paths = _paths(tmp_path, counting_normalize)
+    files = ["src/a.py", "src/b.py", "lib\\c.py"]
+    for f in files:
+        paths.identity(f)
+        paths.in_watch_root(f)
+    first_pass = len(calls)
+    assert first_pass > 0
+    for _ in range(50):
+        for f in files:
+            paths.identity(f)
+            paths.in_watch_root(f)
+    assert len(calls) == first_pass, f"{len(calls)} normalizations for {len(files)} files"
+
+
+def test_cached_answers_match_a_fresh_computation(tmp_path):
+    paths = _paths(tmp_path)
+    outside = (tmp_path.parent / "elsewhere" / "x.py").as_posix()
+    cases = ["src/a.py", "./src/../src/a.py", "lib\\c.py", outside, "", None]
+    for f in cases:
+        for _ in range(2):  # first call fills the cache, second reads it
+            assert paths.identity(f) == paths._identity_uncached(f)
+            identity = paths._identity_uncached(f)
+            expected = bool(identity) and Path(identity).is_relative_to(paths.watch_root)
+            assert paths.in_watch_root(f) is expected
+    assert paths.in_watch_root("src/a.py") is True
+    assert paths.in_watch_root(outside) is False