diff --git a/.watchmanconfig b/.watchmanconfig
index e69de29bb2d1..fe51488c7066 100644
--- a/.watchmanconfig
+++ b/.watchmanconfig
@@ -0,0 +1 @@
+[]
diff --git a/CHANGELOG.md b/CHANGELOG.md
index 95b3d0ec82d2..81696b1d76f5 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,7 @@
 - `[jest-circus, jest-config, jest-runtime]` Add new `injectGlobals` config and CLI option to disable injecting global variables into the runtime ([#10484](https://github.com/facebook/jest/pull/10484))
 - `[jest-each]` Fixes `.each` type to always be callable ([#10447](https://github.com/facebook/jest/pull/10447))
 - `[jest-runner]` Add support for `moduleLoader`s with `default` exports ([#10541](https://github.com/facebook/jest/pull/10541))
+- `[@jest/create-cache-key-function]` Added a new package for creating cache keys ([#10587](https://github.com/facebook/jest/pull/10587))
 
 ### Fixes
 
diff --git a/packages/jest-create-cache-key-function/.npmignore b/packages/jest-create-cache-key-function/.npmignore
new file mode 100644
index 000000000000..3ee5d55b0b89
--- /dev/null
+++ b/packages/jest-create-cache-key-function/.npmignore
@@ -0,0 +1,5 @@
+**/__mocks__/**
+**/__tests__/**
+src
+tsconfig.json
+tsconfig.tsbuildinfo
diff --git a/packages/jest-create-cache-key-function/package.json b/packages/jest-create-cache-key-function/package.json
new file mode 100644
index 000000000000..e59eb4047f12
--- /dev/null
+++ b/packages/jest-create-cache-key-function/package.json
@@ -0,0 +1,25 @@
+{
+  "name": "@jest/create-cache-key-function",
+  "version": "26.4.2",
+  "repository": {
+    "type": "git",
+    "url": "https://github.com/facebook/jest.git",
+    "directory": "packages/jest-create-cache-key-function"
+  },
+  "dependencies": {
+    "graceful-fs": "^4.2.4"
+  },
+  "devDependencies": {
+    "@types/node": "*"
+  },
+  "engines": {
+    "node": ">= 10.14.2"
+  },
+  "license": "MIT",
+  "main": "build/index.js",
+  "types": "build/index.d.ts",
+  "publishConfig": {
+    "access": "public"
+  },
+  "gitHead": "170eee11d03b0ed5c60077982fdbc3bafd403638"
+}
diff --git a/packages/jest-create-cache-key-function/src/__tests__/index.test.ts b/packages/jest-create-cache-key-function/src/__tests__/index.test.ts
new file mode 100644
index 000000000000..ca498a0210fa
--- /dev/null
+++ b/packages/jest-create-cache-key-function/src/__tests__/index.test.ts
@@ -0,0 +1,42 @@
+/**
+ * Copyright (c) Facebook, Inc. and its affiliates. All Rights Reserved.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ */
+
+let NODE_ENV: string;
+let BABEL_ENV: string;
+
+beforeEach(() => {
+  NODE_ENV = process.env.NODE_ENV;
+  process.env.NODE_ENV = 'test';
+  BABEL_ENV = process.env.BABEL_ENV;
+  process.env.BABEL_ENV = 'test';
+});
+
+afterEach(() => {
+  process.env.NODE_ENV = NODE_ENV;
+  process.env.BABEL_ENV = BABEL_ENV;
+});
+
+test('creation of a cache key', () => {
+  const createCacheKeyFunction = require('../index').default;
+  const createCacheKey = createCacheKeyFunction([], ['value']);
+  const hashA = createCacheKey('test', 'test.js', null, {
+    config: {},
+    instrument: false,
+  });
+  const hashB = createCacheKey('test code;', 'test.js', null, {
+    config: {},
+    instrument: false,
+  });
+  const hashC = createCacheKey('test', 'test.js', null, {
+    config: {},
+    instrument: true,
+  });
+
+  expect(hashA.length).toEqual(32);
+  expect(hashA).not.toEqual(hashB);
+  expect(hashA).not.toEqual(hashC);
+});
diff --git a/packages/jest-create-cache-key-function/src/index.ts b/packages/jest-create-cache-key-function/src/index.ts
new file mode 100644
index 000000000000..405411ed986c
--- /dev/null
+++ b/packages/jest-create-cache-key-function/src/index.ts
@@ -0,0 +1,67 @@
+/**
+ * Copyright (c) Facebook, Inc. and its affiliates. All Rights Reserved.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ *
+ */
+
+import {createHash} from 'crypto';
+import {relative} from 'path';
+import {readFileSync} from 'graceful-fs';
+import type {Config} from '@jest/types';
+
+type CacheKeyOptions = {
+  config: Config.ProjectConfig;
+  instrument: boolean;
+};
+
+type GetCacheKeyFunction = (
+  fileData: string,
+  filePath: Config.Path,
+  configStr: string,
+  options: CacheKeyOptions,
+) => string;
+
+function getGlobalCacheKey(files: Array<string>, values: Array<string>) {
+  const dependencies = require('../package').dependencies;
+  return [
+    process.env.NODE_ENV,
+    process.env.BABEL_ENV,
+    dependencies && dependencies['babel-preset-fbjs'],
+    ...values,
+    ...files.map((file: string) => readFileSync(file)),
+  ]
+    .reduce(
+      (hash, chunk) => hash.update('\0', 'utf-8').update(chunk || ''),
+      createHash('md5'),
+    )
+    .digest('hex');
+}
+
+function getCacheKeyFunction(globalCacheKey: string) {
+  return (
+    src: string,
+    file: Config.Path,
+    _configString: string,
+    options: CacheKeyOptions,
+  ) => {
+    const {config, instrument} = options;
+    const rootDir = config && config.rootDir;
+
+    return createHash('md5')
+      .update(globalCacheKey)
+      .update('\0', 'utf8')
+      .update(src)
+      .update('\0', 'utf8')
+      .update(rootDir ? relative(config.rootDir, file) : '')
+      .update('\0', 'utf8')
+      .update(instrument ? 'instrument' : '')
+      .digest('hex');
+  };
+}
+
+export default (
+  files: Array<string> = [],
+  values: Array<string> = [],
+): GetCacheKeyFunction => getCacheKeyFunction(getGlobalCacheKey(files, values));
diff --git a/packages/jest-create-cache-key-function/tsconfig.json b/packages/jest-create-cache-key-function/tsconfig.json
new file mode 100644
index 000000000000..7bb06bce6d20
--- /dev/null
+++ b/packages/jest-create-cache-key-function/tsconfig.json
@@ -0,0 +1,7 @@
+{
+  "extends": "../../tsconfig.json",
+  "compilerOptions": {
+    "rootDir": "src",
+    "outDir": "build"
+  }
+}
diff --git a/yarn.lock b/yarn.lock
index 2abda00e24c1..e1c54afa81f5 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -1808,6 +1808,15 @@ __metadata:
   languageName: unknown
   linkType: soft
 
+"@jest/create-cache-key-function@workspace:packages/jest-create-cache-key-function":
+  version: 0.0.0-use.local
+  resolution: "@jest/create-cache-key-function@workspace:packages/jest-create-cache-key-function"
+  dependencies:
+    "@types/node": "*"
+    graceful-fs: ^4.2.4
+  languageName: unknown
+  linkType: soft
+
 "@jest/environment@^26.3.0, @jest/environment@workspace:packages/jest-environment":
   version: 0.0.0-use.local
   resolution: "@jest/environment@workspace:packages/jest-environment"