Caffeine is a silver bullet in neonatology. This ubiquitous trimethylxanthine, pervasively used in the human diet and beverages, significantly impacts on major acute neonatal morbidities including apnea of prematurity, bronchopulmonary dysplasia, patent ductus arteriousus with or without surgical ligation and post-operative apnea. Potential uses in respiratory distress syndrome as suggested by improved lung function in primate models is supported by the decreased time on mechanical ventilation and need for oxygen therapy. Improved later outcomes at 18 to 22 months include clinically significant decreases in cerebral palsy, cognitive impairment, and severe retinopathy of prematurity in those babies who received caffeine during the neonatal period compared to non-caffeine treated placebo neonates. Ongoing and future research studies focus on optimizing current dose regimens to determine whether benefits can be maximized while maintaining an impressive safety profile. Molecular pharmacologic studies focused on the molecular and the biochemical mechanisms underlying the protective effects of caffeine are also being done to optimize treatment regimes and to target potential molecular pathways leading to further decreases in acute and long term neonatal morbidities. Since its use in newborns three decades ago, caffeine is now one of the safest, most cost-beneficial and effective therapies in the newborn.