Although it is widely believed that caffeine antagonizes the intoxicating effects of alcohol, the molecular mechanisms underlying their interaction are incompletely understood. It is known that both caffeine and alcohol alter adenosine neurotransmission, but the relationship is complex, and may be dose dependent. In this article, we review the available literature on combining caffeine and alcohol. Ethical constraints prohibit laboratory studies that would mimic the high levels of alcohol intoxication achieved by many young people in real-world settings, with or without the addition of caffeine. We propose a possible neurochemical mechanism for the increase in alcohol consumption and alcohol-related consequences that have been observed in persons who simultaneously consume caffeine. Caffeine is a nonselective adenosine receptor antagonist. During acute alcohol intake, caffeine antagonizes the "unwanted" effects of alcohol by blocking the adenosine A1 receptors that mediate alcohol's somnogenic and ataxic effects. The A1 receptor-mediated "unwanted" anxiogenic effects of caffeine may be ameliorated by alcohol-induced increase in the extracellular concentration of adenosine. Moreover, by means of interactions between adenosine A2A and dopamine D2 receptors, caffeine-mediated blockade of adenosine A2A receptors can potentiate the effects of alcohol-induced dopamine release. Chronic alcohol intake decreases adenosine tone. Caffeine may provide a "treatment" for the withdrawal effects of alcohol by blocking the effects of upregulated A1 receptors. Finally, blockade of A2A receptors by caffeine may contribute to the reinforcing effects of alcohol.