Caffeine is the most widely consumed psychoactive substance in the world. It is readily available in coffee and other foods and beverages, and is used to mitigate sleepiness, enhance performance, and treat apnea in premature infants. This review systematically explores evidence from epidemiological studies and randomized controlled trials as to whether coffee and caffeine have deleterious effects on sleep. Caffeine typically prolonged sleep latency, reduced total sleep time and sleep efficiency, and worsened perceived sleep quality. Slow-wave sleep and electroencephalographic (EEG) slow-wave activity were typically reduced, whereas stage-1, wakefulness, and arousals were increased. Dose- and timing-response relationships were established. The sleep of older adults may be more sensitive to caffeine compared to younger adults. Pronounced individual differences are also present in young people, and genetic studies isolated functional polymorphisms of genes implicated in adenosine neurotransmission and metabolism contributing to individual sensitivity to sleep disruption by caffeine. Most studies were conducted in male adults of Western countries, which limits the generalizability of the findings. Given the importance of good sleep for general health and functioning, longitudinal investigations aimed at establishing possible causal relationships among coffee- and caffeine-induced changes in sleep quality and health development are warranted.