What does -XX:MaxPermSize do?

The permanent space is where the classes, methods, internalized strings, and similar objects used by the VM are stored and never deallocated (hence the name).

This Oracle article succinctly presents the working and parameterization of the HotSpot GC and advises you to augment this space if you load many classes (this is typically the case for application servers and some IDE like Eclipse) :

The permanent generation does not have a noticeable impact on garbage collector performance for most applications. However, some applications dynamically generate and load many classes; for example, some implementations of JavaServer Pages (JSP) pages. These applications may need a larger permanent generation to hold the additional classes. If so, the maximum permanent generation size can be increased with the command-line option -XX:MaxPermSize=.

Note that this other Oracle documentation lists the other HotSpot arguments.

Update : Starting with Java 8, both the permgen space and this setting are gone. The memory model used for loaded classes and methods is different and isn’t limited (with default settings). You should not see this error any more.

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