Abstract Background Pu-erh tea is a traditional Chinese tea and produced by natural solid-state fermentation. Several studies show that the natural microbiota influence caffeine level in pu-erh tea. Our previous research also found that the caffeine declined significantly (p < 0.05) in the fermentation, which suggested that the caffeine level could be influenced by specific strains. The purpose of this study was to isolate and identify microorganisms for caffeine degradation, and this research explored the degradation products from caffeine and optimal condition for caffeine degradation. Results 11 Fungi were isolated from pu-erh tea fermentation and 7 strains could survive in caffeine solid medium. Two superior strains were identified as Aspergillus niger NCBT110A and Aspergillus sydowii NRRL250 by molecular identification. In the substrate tests with caffeine, A. niger NCBT110A could use caffeine as a potential carbon source while glucose is absent, A. sydowii NRRL250 could degrade 600 mg/L caffeine completely in a liquid medium. During the degradation product analysis of A. sydowii NRRL250, theophylline and 3-methlxanthine were detected, and the level of theophylline and 3-methlxanthine increased significantly (p < 0.05) with the degradation of caffeine. The single factor analysis showed that the optimum conditions of caffeine degradation were 1) substrate concentration of 1200 mg/L, 2) reaction temperature at 30 °C, and 3) pH of 6. In the submerged fermentation of tea infusion by A. sydowii NRRL250, 985.1 mg/L of caffeine was degraded, and 501.2 mg/L of theophylline was produced. Conclusions Results from this research indicate that Aspergillus sydowii NRRL250 was an effective strain to degrade caffeine. And theophylline and 3-methlxanthine were the main caffeine degradation products.