Embedded microprocessor cache memories suffer from limited observability and controllability creating problems during in-system tests. This paper presents a procedure to transform traditional march tests into software-based self-test programs for set-associative cache memories with LRU replacement. Among all the different cache blocks in a microprocessor, testing instruction caches represents a major challenge due to limitations in two areas: 1) test patterns which must be composed of valid instruction opcodes and 2) test result observability: the results can only be observed through the results of executed instructions. For these reasons, the proposed methodology will concentrate on the implementation of test programs for instruction caches. The main contribution of this work lies in the possibility of applying state-of-the-art memory test algorithms to embedded cache memories without introducing any hardware or performance overheads and guaranteeing the detection of typical faults arising in nanometer CMOS technologies.