Sharing content over a mobile network through opportunistic contacts has recently received considerable attention. In proposed scenarios, users store content they download in a local cache and share it with other users they meet, e.g., via Bluetooth or WiFi. The storage capacity of mobile devices is typically limited; therefore, identifying which content a user should store in her cache is a fundamental problem in the operation of any such content distribution system. In this work we propose Psephos, a novel mechanism for determining the caching policy of each mobile user. Psephos is fully distributed: users compute their own policies individually, in the absence of a central authority. Moreover, it is designed for a heterogeneous environment, in which demand for content, access to resources, and mobility characteristics may vary across different users. Most importantly, the caching policies computed by our mechanism are optimal: we show that Psephos maximizes the system’s social welfare. To the best of our knowledge, our work is the first to address caching with heterogeneity in a fully distributed manner.