BACKGROUND: Caffeine ingestion stimulates both lipolysis and energy expenditure. OBJECTIVES: Our objectives were to determine whether the lipolytic effect of caffeine is associated with increased lipid oxidation or futile cycling between triacylglycerol and free fatty acids (FFAs) and whether the effects of caffeine are mediated via the sympathetic nervous system. DESIGN: Respiratory exchange and [1-(13)C]palmitate were used to trace lipid oxidation and FFA turnover in 8 healthy, young men for 90 min before and 240 min after ingestion of placebo, caffeine (10 mg/kg), or caffeine during beta-adrenoceptor blockade. RESULTS: During fasting conditions, there were few differences in measured variables between the 3 tests. During steady state conditions (last hour of the test) after ingestion of caffeine, lipid turnover increased 2-fold (P < 0.005), and the mean (+/-SEM) thermic effect was 13.3 +/- 2.2% (P < 0.001), both of which were greater than after ingestion of placebo or caffeine during beta-adrenoceptor blockade. After ingestion of caffeine, oxidative FFA disposal increased 44% (236 +/- 21 to 340 +/- 16 micro mol/min), whereas nonoxidative FFA disposal increased 2.3-fold (455 +/- 66 to 1054 +/- 242 micro mol/min; P < 0.01). In postabsorptive conditions, 34% of lipids were oxidized and 66% were recycled. Caffeine ingestion increased energy expenditure 13% and doubled the turnover of lipids, of which 24% were oxidized and 76% were recycled. beta-Adrenoceptor blockade decreased, but did not inhibit, these variables. CONCLUSIONS: Many, but not all, of the effects of caffeine are mediated via the sympathetic nervous system. The effect of caffeine on lipid mobilization in resting conditions can be interpreted in 2 ways: lipid mobilization alone is insufficient to drive lipid oxidation, or large increments in lipid turnover result in small increments in lipid oxidation.