Caffeine can enhance exercise efficiency by boosting performance, increasing alertness, and reducing perceived exertion. It primarily works by acting on the central nervous system to improve endurance and strength. Regular consumption may help athletes perform better in prolonged activities, as it can increase stamina and delay fatigue. However, individual responses to caffeine vary, and excessive intake may lead to negative side effects such as insomnia or heightened anxiety. Moderation is key for optimal benefits.