Caffeic acid (CA) is a phenolic compound widely found in coffee beans with known beneficial effects in vivo. Many studies showed that CA has anti-inflammatory, anti-mutagenic, antibacterial and anti-carcinogenic properties, which could be linked to its antioxidant activity. Taking in consideration the reported in vitro antioxidant mechanism of other polyphenols, our working hypothesis was that the CA antioxidant activity could be related to its metal-chelating property. With that in mind, we sought to investigate the chemical antioxidant mechanism of CA against in vitro iron-induced oxidative damage under different assay conditions. CA was able to prevent hydroxyl radical formation promoted by the classical Fenton reaction, as determined by 2-deoxyribose (2-DR) oxidative degradation and DMPO hydroxylation. In addition to its ability to prevent hydroxyl radical formation, CA had a great inhibition of membrane lipid peroxidation. In the lipid peroxidation assays CA acted as both metal-chelator and as hydrogen donor, preventing the deleterious action promoted by lipid-derived peroxyl and alkoxyl radicals. Our results indicate that the observed antioxidant effects were mostly due to the formation of iron-CA complexes, which are able to prevent 2-DR oxidation and DMPO hydroxylation. Noteworthy, the formation of iron-CA complexes and prevention of oxidative damage was directly related to the pH of the medium, showing better antioxidant activity at higher pH values. Moreover, in the presence of lipid membranes the antioxidant potency of CA was much higher, indicating its enhanced effectiveness in a hydrophobic environment. Overall, our results show that CA acts as an antioxidant through an iron chelating mechanism, preventing the formation of free hydroxyl radicals and, therefore, inhibiting Fenton-induced oxidative damage. The chemical properties of CA described here—in association with its reported signaling effects—could be an explanation to its beneficial effects observed in vivo.