Nginx as a reverse proxy and static/dynamic content server at the same time

I don't think that there is a way to explicitly invalidate cached items, but here is an example of how to do the rest. Update: As mentioned by Piotr in another answer, there is a cache purge module that you can use. You can also force a refresh of a cached item using nginx's proxy_cache_bypass - see Cherian's answer for more information.

In this configuration, items that aren't cached will be retrieved from example.net and stored. The cached versions will be served up to future clients until they are no longer valid (60 minutes).

Your Cache-Control and Expires HTTP headers will be honored, so if you want to explicitly set an expiration date, you can do that by setting the correct headers in whatever you are proxying to.

There are lots of parameters that you can tune - see the nginx Proxy module documentation for more information about all of this including details on the meaning of the different settings/parameters: http://nginx.org/r/proxy_cache_path

http {
  proxy_cache_path  /var/www/cache levels=1:2 keys_zone=my-cache:8m max_size=1000m inactive=600m;
  proxy_temp_path /var/www/cache/tmp; 


  server {
    location / {
      proxy_pass http://example.net;
      proxy_cache my-cache;
      proxy_cache_valid  200 302  60m;
      proxy_cache_valid  404      1m;
    }
  }
}

1. Yes you can use your nginx install. You don't need to proxy at all, just continue using passenger with nginx and have nginx server static content direct

2. Popular opinion is probably, if you had Apache or Squid running you might consider using them, but since you have nginx already, nginx is a great choice. Avoiding using passenger to serve static files may offer significant performance gains - but of course you milage will vary.

3. Same server/slice probably fine, if your traffic was so large that it had an impact, sure move it to another server, but there is no reason to proxy it, just change the urls accordingly - this is what serverfault does.

An example config file would be:

server {
listen www.example.com:80;

server_name  www.example.com;

    location ~* ^.+\.(jpg|jpeg|gif|png|css|bmp|js|ico|swf)$ {
       root  /home/static/files;
       expires 7d;
    }

    location / {
       root /home/rails_app;
       passenger_enabled on;
    }     

}

Obviously add any additional files types as necessary.