Caulfield was born in Glasgow, Scotland. His American stepfather, a Marine instructor at Parris Island, kicked him out of the house at the age of 15. At 18 he moved to the U.S., and got his green card.

Caulfield made his acting debut off-Broadway in 1981 in the title role of Joe Orton's Entertaining Mr. Sloane as a drifter.

He made his Broadway debut in J. B. Priestley's An Inspector Calls opposite Sian Phillips. He also played opposite Jessica Tandy in Salonika. Caulfield is currently performing in the Charles Busch play Our Leading Lady, opposite Kate Mulgrew.

His first major movie role was as the geek turned hunk, Michael Carrington, in the musical film Grease 2 (1982) opposite Michelle Pfeiffer.

Caulfield's other appearances include:

Caulfield has also done voiceover work; he voiced the character of Alistair Smythe in Spider-Man: The Animated Series from 1994-1998 and was the voice of James Bond in the videogame Nightfire.

In 1980, Caulfield, who was then 21, married noted actress Juliet Mills. The couple received substantial press attention at the time; at 39, Mills was 18 years his senior. He became stepfather to her daughter, Melissa Miklenda (who now goes by Melissa Caulfield).

Having spent most of his adult life in the US, what he misses most about the UK is live football matches. He is a Chelsea F.C. fan.

Theater World Award for his performance in Class Enemy.