In accordance with an embodiment, described herein is a system and method for resource isolation and consumption in an application server environment. The system can provide, at one or more computers, including an application server environment executing thereon, a plurality of resources which can be used within the application server environment, and one or more partitions, wherein each partition provides an administrative and runtime subdivision of a domain. The system can also configure a resource consumption management module to monitor each partition's usage of the plurality of resources. The resource consumption management module can comprise at least one member of the group consisting of resource reservations, resource constraints, and resource notifications.