Caffeine consumption, a ubiquitous cultural phenomenon with significant health implications may be governed by some of the same principles which affect other drug use [1]. We hypothesized that pharmacological and expectancy effects may be two of those principles. A balanced placebo design was used with 100 male undergraduates to separate caffeine's active drug effects from the expectancy of having consumed caffeine on mood, performance, and physiological measures. The manipulation of expectancies was highly effective on subjects' judgments of caffeine dosage, regardless of actual caffeine content. As predicted, expectancy set and caffeine content appeared equally powerful, and worked additively, to affect subjects' ratings of how much the coffee influenced their mood and performance. Main effects on systolic and diastolic blood pressure, pulse rate, and a fatigue measure were found for caffeine vs. no caffeine groups only. Additional increases in diastolic blood pressure for smokers were noted within the caffeine-receiving conditions. Results are discussed with heuristic and health implications.