Caffeine is a purine alkaloid and is a major constituent of coffee, tea and other beverages. It acts as a central nervous system stimulant and also has negative withdrawal effects. Decaffeinated beverages are being used to overcome its negative effects. Decaffeination is done by different methods like solvent, water and super critical fluid extraction. These methods apart from being non-specific are expensive and involve the usage of toxic organic solvents. Development of a process involving an enzymatic (specific) degradation of caffeine to non-toxic compound is necessary to solve the problems of chemical extraction of caffeine in food products as well as treating the caffeine containing waste products. The different microbial and enzymatic methods of caffeine removal are discussed in this review. The literature revealed that major caffeine degrading strains belong to Pseudomonas and Aspergillus. Though the enzymes involved in degradation of caffeine by microorganisms are known, in vitro enzymatic studies for caffeine degradation is not yet reported. © 2005 Elsevier Inc. All rights reserved.