Caffeine in the form of various beverages and as an additive in numerous drug formulations is the most widely consumed drug in the world. Its psychostimulant properties account for much of its popularity. Caffeine has multiple pharmacological effects that influence normal physiological functioning, and it has been suspected of contributing to morbidity. Drug interactions of caffeine with other psychoactive drugs are described. This review summarizes the pharmacology of caffeine and its drug interactions relevant to the practice of clinical psychopharmacology. The impact of caffeine consumption should be considered in planning and assessing responses to pharmacotherapy for mental illness.