Caffeine has both positive effects that contribute to widespread consumption of caffeine-containing beverages and adverse unpleasant effects if doses are increased. Caffeine has weak reinforcing properties, but with little or no evidence for upward dose adjustment, possibly because of the adverse effects of higher doses. Withdrawal symptoms, although relatively limited with respect to severity, do occur, and may contribute to maintenance of caffeine consumption. Health hazards are small if any and caffeine use is not associated with incapacitation. Thus, although caffeine can be argued to fulfill regulatory criteria as a dependence-producing drug, the extensive use of caffeine-containing beverages poses little apparent risk to the consumer or to society. The positive stimulatory effects of caffeine appear in large measure to be due to blockade of A2A receptors that stimulate GABAergic neurons of inhibitory pathways to the dopaminergic reward system of the striatum. However, blockade of striatal A1 receptors may also play a role. The mechanisms underlying negative effects of higher doses of caffeine are as yet not well defined.