Plants have evolved a set of protecting mechanisms against pathogens, which include secondary metabolites and induced defense responses to pathogen attack. The biological role of purine alkaloids including caffeine is largely unknown. It has been proposed that caffeine confers a resistance against pathogenic bacteria and herbivores. We, in this study, tested direct effects on the growth of rice pathogenic microbes, Xanthomonas oryzae pv. oryzae (Xoo) causing a bacterial leaf blight and Magnaporthe grisea (M. grisea) causing a rice blast. Cell growth of Xoo and M. grisea were significantly retarded in presence of high concentration (2mM) of caffeine. Exogenous caffeine (5mM) induced resistance of wild type rice (cv. Dongjin, susceptible to Xoo and M. grisea) against those pathogens. These results indicated that caffeine enhanced the basal resistance to infection with Xoo. In addition, expression of pathogenesis-related (PR) genes was tested in the caffeine treated rice to elucidate the acquired resistance by caffeine, resulted in induction of PR genes including OsPR1a and OsPrb1. We have generated a transgenic rice producing caffeine by introduction of three N- methyltransferase genes (CaXMT1, CaMXMT1, CaDXMT1) identified from coffee plant. The transgenic rice successfully expressed the three genes, synthesized caffeine up to 5ug/g and showed enhanced resistance to Xoo. We also observed that transcripts of PR genes such as the OsPR1a and OsPrb1 encoding PR-1 type pathogenesis-related protein increased in the caffeine-producing rice. These result showed that caffeine is likely to act a powerful factor to increase level of rice defense as a natural and non-harmful metabolite.