Apnoea of prematurity is among the most commonly diagnosed conditions in the newborn intensive care unit and may prolong the hospital stay of some infants. Resolution of recurrent apnoea and episodes of bradycardia and the completion of an "apnoea-free" period are generally considered to be preconditions for the discharge of premature infants without a home cardiorespiratory monitor. Caffeine is one of the drugs most commonly prescribed for premature infants. It is a potent respiratory stimulant indicated primarily to reduce the incidence of episodes of apnoea associated with an immature central nervous system. It is also used frequently in these infants to facilitate weaning from mechanical ventilation. Caffeine is presently one of the 10 most frequently prescribed medications in neonatal intensive care for which extensive pharmacokinetic data are available, particularly in the preterm neonate. Although very similar in its actions to theophylline, caffeine has several advantages and has become the preferred methylxanthine in the treatment of apnoea. Its toxicity is lower and half-life is longer, and there is less need for therapeutic drug monitoring. Foetuses and newborns are exposed to caffeine via maternal intake of caffeine-containing foods and beverages. This widespread and extensive exposure to caffeine must be considered in the evaluation of the long-term effects of caffeine in the newborn and young infants. Despite the widespread use of caffeine for these indications, the evidence to support its use is based on the results of a few relatively small, short-term studies. Recently, there has been a resurgence of interest in this drug. Studies have reported some intriguing possibilities, such as the protective effect of caffeine on the brain and lungs. The main goal of this paper is to present a review of the pharmacokinetics of caffeine and its cellular effect on the physiology of newborns with apnoea.