Caffeine enhances exercise performance, but its mechanisms of action remain unclear. In this study, we investigated its effects on neuromuscular function in a non-fatigued state and during fatiguing exercise. Eighteen men participated in this randomized, double-blind, placebo-controlled crossover trial. Baseline measures included plantarflexion force, drop jump, squat jump, voluntary activation of triceps surae muscle, soleus muscle contractile properties, M-wave, -motoneuron excitability (H-reflex), corticospinal excitability, short-interval intracortical inhibition, intracortical facilitation, silent period evoked by transcranial magnetic stimulation (SP) and plasma potassium and caffeine concentrations. Immediately after baseline testing, participants ingested caffeine (6 mg⋅kg −1 ) or placebo. After a 1-h rest, baseline measures were repeated, followed by a fatiguing stretch-shortening cycle exercise (sets of 40 bilateral rebound jumps on a sledge apparatus) until task failure. Neuromuscular testing was carried out throughout the fatigue protocol and afterwards. Caffeine enhanced drop jump height (by 4.2%) and decreased the SP (by 12.6%) in a non-fatigued state. A caffeine-related decrease in SP and short-interval intracortical inhibition before the fatiguing activity was associated with an increased time to task failure. The participants who benefitted from an improved performance on the caffeine day reported a significantly lower sense of effort during exercise and had an accelerated postexercise recovery of M-wave amplitude. Caffeine modulates inhibitory mechanisms of the CNS, recovery of M-wave amplitude and perception of effort. This study lays the groundwork for future examinations of differences in caffeine-induced neuromuscular changes between those who are deemed to benefit from caffeine ingestion and those who are not.