Energy consumption is a major concern in embedded computing systems. Several studies have shown that cache memories account for 40% or more of the total energy consumed in these systems. Active power used to be the primary contributor to total power dissipation of CMOS designs, but with the technology scaling, the share of leakage in total power consumption of digital systems continues to grow. Moreover, temperature is another factor that exponentially increases the leakage current. In this paper, we show the effect of temperature on the optimal (minimum-energy-consuming) cache configuration for low energy embedded systems. Our results show that for a given application and technology, the optimal cache size moves toward smaller caches at higher temperatures, due to the larger leakage. Consequently, a Temperature-Aware Configurable Cache (TACC) is an effective way to save energy in finer technologies when the embedded system is used in different temperatures. Our results show that using a TACC, up to 61% energy can be saved for instruction cache and 77% for data cache compared to a configurable cache that has been configured for only the corner-case temperature (100°C). Furthermore, the TACC also enhances the performance by up to 28% for the instruction cache and up to 17% for the data cache.