Caffeine is a member of the alkaloid family whose molecules consist of nitrogen-containing rings. Caffeine (molecular formula is C8H10N4O2.H2O) is the common name for trimethylxanthine. Caffeine’s systematic name is 1,3,7-trimethylxanthine or 3,7-dihydro-1,3,7-trimethyl-1H-purine-2,6-dione. [1, 2]
The molecule was first isolated by the German chemist Friedrich Ferdinand Runge in 1819. Caffeine is also called guaraninewhen found in guarana, mateine when found in mate, and theine when found in tea. All these names are considered chemical synonyms for the same chemical compound. Purified caffeine is a bitter, a fleecy white solid or long silky crystals like odourless substance which is found in coffee, tea, soft drinks, chocolate, some nuts and certain medicines. When heated, caffeine loses water at 176°F (80°C), sublimes at 352.4°F (178°C), and/or melts at 458.2°F (236.8°C). It is only slightly soluble in water and alcohol, but dissolves readily in chloroform. Water solutions of caffeine are essentially neutral (pH = 6.9).
Caffeine is naturally found in varying quantities in the beans, leaves, and fruit of over 60 plants including coffee beans, guarana, yerba maté, cacao beans, and tea, where it acts as a natural pesticide that paralyzes and kills certain insects feeding on the plants. It is most commonly consumed by humans in infusions extracted from the beans of the coffee plant and the leaves of the tea bush, as well as from various foods and drinks containing products derived from the kola nut or from cacao. Other sources include yerba mate, guarana berries, and the Yaupon Holly.
In humans, caffeine is a central nervous system stimulant, having the effect of temporarily warding off drowsiness and restoring alertness. It also stimulates heart rate, and respiration, has psychotropic (mood altering) properties, and acts as a mild diuretic. [1, 2] Beverages containing caffeine, such as coffee, tea, soft drinks and energy drinks enjoy great popularity; caffeine is the world's most widely consumed psychoactive substance, but unlike most other psychoactive substances, it is legal and unregulated in nearly all jurisdictions.
Mechanism of Action
Several mechanisms have been proposed to explain the actions of methylxanthines, but none have been firmly established.
One of these mechanisms says that, at high concentrations the methylxanthines can be shown in vitro to inhibit several members of phosphodiesterase enzyme family. Since the posphodiesterases hydrolyze cyclic nucleotides, this inhibition results in higher concentrations of intracellular cyclic AMP (cAMP) and in some tissues, cyclic GMP (cGMP). This effect could explain the cardiac stimulation and smooth muscle relaxation is produced by these chemicals as well as decreased release of inflammatory mediators fro mast cells. Phosphodiesterase 4 (PDE 4) appears to be the isoform most directly involved in the airway actions of methylxanthines. 
Another proposed mechanism is the inhibition of cell surface receptors for adenosine. These receptors modulate adenylyl cyclase activity, and adenosine has been shown to cause contraction of isolated airway smooth muscle and to provoke histamine release from the airway mast cells. 
01. Dr AD Smith et al, Oxford dictionary of biochemistry and molecular biology, revised edition. 2000. pp 86
02. Bertram G Katzung, Basic and clinical pharmacology, 9th edition, pp 325-327