Caffeine is administered topically and transdermally for a variety of pharmaceutical and cosmetic applications and it is also used as a model hydrophilic compound in dermal risk assessment studies. This review considers the physicochemical and permeation properties of caffeine with reference to its delivery to and through the skin. Since it has been used as a model compound the findings have implications for the delivery of many hydrophilic compounds having similar properties. Various passive and active formulation strategies to promote enhanced skin permeation of caffeine are considered. Models to study percutaneous caffeine penetration are also discussed in detail.