Caffeine (particularly in the form of coffee) is one of the most widely consumed stimulants in the world, with 90% of American adults consuming caffeine-infused beverages almost daily. While there is substantial evidence that caffeine enhances performance, caffeine withdrawal leads to deficits at both the individual (eg, cognitive, emotional, and behavioral processes) and societal (eg, increases in work accidents) level. Scholars for some time have considered that the supposed psychoactive benefits of caffeine may be the result of the mere reversal of deleterious effects of caffeine withdrawal, rather than a net benefit of caffeine ingestion. In this integrative review, we examine evidence illuminating the relationship between caffeine consumption and subsequent quality and quantity of night time rest. Secondly, we consider evidence as to whether performance deficits caused by sleep deprivation linked to caffeine can be reversed by caffeine consumption during the subsequent daytime period. Finally, we consider how these two stages can be reconciled in a single model that enables calculation of the net caffeine effect on daytime functioning. The literature highlights a range of positive impacts of caffeine consumption on both physical and cognitive functioning. There are also a number of factors that complicate any conclusions that can be drawn regarding the potential of caffeine to improve performance. Most critically, performance improvements the next day may simply be a result of the reversal of caffeine withdrawal. Animal studies and well-controlled human studies involving high habitual and low habitual users tend to confirm a “net benefit” for caffeine use. Further research, particularly with (necessarily rare) caffeine-naive populations, is required to elucidate the complexities of the relationship between caffeine, sleep, and daytime functioning. However, the convenience of accessing caffeine compared to ensuring adequate restorative sleep means that caffeine has applied advantages that are likely to see its use as a performance “enhancing” substance persist.