diff --git a/airflow-core/newsfragments/71704.bugfix.rst b/airflow-core/newsfragments/71704.bugfix.rst
new file mode 100644
index 0000000000000..5cd2aed7ec0dd
--- /dev/null
+++ b/airflow-core/newsfragments/71704.bugfix.rst
@@ -0,0 +1 @@
+The scheduler's Dag cache is now a bounded LRU of 512 versions, so scheduler memory no longer grows with every Dag version the process has ever seen.
diff --git a/airflow-core/src/airflow/jobs/scheduler_job_runner.py b/airflow-core/src/airflow/jobs/scheduler_job_runner.py
index a6343c4ae6c71..d03b1d456f466 100644
--- a/airflow-core/src/airflow/jobs/scheduler_job_runner.py
+++ b/airflow-core/src/airflow/jobs/scheduler_job_runner.py
@@ -154,6 +154,18 @@
 TASK_STUCK_IN_QUEUED_RESCHEDULE_EVENT = "stuck in queued reschedule"
 """:meta private:"""
 
+SCHEDULER_DAG_CACHE_SIZE = 512
+"""
+Max deserialized Dag versions the scheduler keeps in memory.
+
+The scheduler reaches its DagBag through the Dag version of each active Dag run, so an
+unbounded cache retains every version the process has ever seen and grows for the life of
+the process. Sized to sit above the versions-with-runs-in-flight working set of a typical
+deployment, so eviction costs a re-fetch only where that working set is genuinely larger.
+
+:meta private:
+"""
+
 # Per-tick cap on pending AssetPartitionDagRun rows the scheduler evaluates.
 # Bounds the per-tick transaction so executor heartbeats and regular scheduling
 # aren't starved; remaining APDRs drain across subsequent ticks.
@@ -348,7 +360,7 @@ def __init__(
         if log:
             self._log = log
 
-        self.scheduler_dag_bag = DBDagBag(load_op_links=False)
+        self.scheduler_dag_bag = DBDagBag(load_op_links=False, cache_size=SCHEDULER_DAG_CACHE_SIZE)
 
         # Set of (dag_id, asset_name, asset_uri) tuples for trigger policies that
         # are permanently unreachable for the rollup window's cardinality — the
diff --git a/airflow-core/tests/unit/jobs/test_scheduler_job.py b/airflow-core/tests/unit/jobs/test_scheduler_job.py
index 72ed2065bdbff..419b459bc3619 100644
--- a/airflow-core/tests/unit/jobs/test_scheduler_job.py
+++ b/airflow-core/tests/unit/jobs/test_scheduler_job.py
@@ -57,7 +57,7 @@
 from airflow.executors.executor_utils import ExecutorName
 from airflow.executors.local_executor import LocalExecutor
 from airflow.jobs.job import Job, run_job
-from airflow.jobs.scheduler_job_runner import SchedulerJobRunner
+from airflow.jobs.scheduler_job_runner import SCHEDULER_DAG_CACHE_SIZE, SchedulerJobRunner
 from airflow.models.asset import (
     AssetActive,
     AssetAliasModel,
@@ -410,6 +410,15 @@ def test_executor_loaded_in_scheduler_job(self, mock_init_executors, mock_defaul
         assert scheduler_job.executor == mock_local_executor
         assert scheduler_job.executors == [mock_local_executor]
 
+    def test_scheduler_dag_bag_is_bounded(self):
+        """The scheduler's Dag cache must evict, or it retains every version it has ever seen."""
+        from cachetools import LRUCache
+
+        job_runner = SchedulerJobRunner(Job())
+
+        assert isinstance(job_runner.scheduler_dag_bag._dags, LRUCache)
+        assert job_runner.scheduler_dag_bag._dags.maxsize == SCHEDULER_DAG_CACHE_SIZE
+
     @pytest.mark.parametrize(
         "heartrate",
         [10, 5],