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Caffeine is a metabolite derived from purine nucleotides, typically accounting for 2–5% of the dry weight of tea and 1–2% of the dry weight of coffee. In the tea and coffee plants, the main synthesis pathway of caffeine is a four-step sequence consisting of three methylation reactions and one nucleosidase reaction using xanthine as a precursor. In bacteria, caffeine degradation occurs mainly through the pathways of N-demethylation and C-8 oxidation. However, a study fully and systematically summarizing the metabolism and application of caffeine in microorganisms has not been established elsewhere. In the present study, we provide a review of the biosynthesis, microbial degradation, gene expression, and application of caffeine microbial degradation. The present review aims to further elaborate the mechanism of caffeine metabolism by microorganisms and explore the development prospects in this field.