Until the late 1970's, trains on the Atchison, Topeka and Santa Fe railroad's Oakland-Richmond line cut through the residential neighborhoods of West Berkeley. The line was officially abandoned in 1979 and the tracks removed shortly thereafter. Most of the right-of-way has since become the Ohlone Greenway trail, with BART trains running above ground in the northernmost part.
Little evidence remains of the railroading history of the space; some of the wooden ties have been recycled into various uses in adjacent homes, and that's about it. But there has been relatively little encroachment from new construction along most of the route in Berkeley, so the path of the old tracks still stands out pretty well on aerial images of the area. The old right-of-way today plays host to small parks, bike paths, and, most importantly, a plethora of fine geocaches, including Strawberry Creek Park, Berkeley Way Mini-Park, Make me a Bike Path, and Cows? In Berkeley?, among others past and present. In fact, right now you can walk the route and find a cache roughly every 1/4 mile, at least in the Northern Berkeley section.
This small cache is hidden in plain sight along a less traveled (and until now cache-less) section of the old trackway, a slightly rustic trail in a quiet residential area. The path was recently paved, but the cache survives. It is best approached on the path from the north or the south. (Because the cache is rather exposed, please be careful to maintain the surrounding camouflage when you're finished.)
Update (corrected): Congratulations to first finder camsoradap.
Note: Cache replaced 1/26/2014. It's now a large micro, with room only for the log and small items. Contains a thermometer for the next to find.