Various embodiments of a cluster of application servers in a networked computer system in which each application server includes a separate transaction manager instance are disclosed. In one embodiment, a separate transaction manager instance may be used to coordinate transactions initiated by an application component executing in process with the application server for a node of a cluster. If each transaction manager instance manages only transactions initiated within its own application server, then the loss of a single transaction manager instance may have no detrimental effect on transactions initiated in other nodes of the cluster. Further, if each transaction manager instance maintains its transaction logs in highly available memory accessible to all nodes of the cluster, in flight transactions of a failed node may be recovered by an instance in a different node.