Hardware prefetching and last-level cache (LLC) management are two independent mechanisms to mitigate the growing latency to memory. However, the interaction between LLC management and hardware prefetching has received very little attention. This paper characterizes the performance of state-of-the-art LLC management policies in the presence and absence of hardware prefetching. Although prefetching improves performance by fetching useful data in advance, it can interact with LLC management policies to introduce application performance variability. This variability stems from the fact that current replacement policies treat prefetch and demand requests identically. In order to provide better and more predictable performance, we propose Prefetch-Aware Cache Management (PACMan). PACMan dynamically estimates and mitigates the degree of prefetch-induced cache interference by modifying the cache insertion and hit promotion policies to treat demand and prefetch requests differently. Across a variety of emerging workloads, we show that PACMan eliminates the performance variability in state-of-the-art replacement policies under the influence of prefetching. In fact, PACMan improves performance consistently across multimedia, games, server, and SPEC CPU2006 workloads by an average of 21.9% over the baseline LRU policy. For multiprogrammed workloads, on a 4-core CMP, PACMan improves performance by 21.5% on average.