Caffeic acid (3,4-dihydroxycinnamic acid) serves as a building block for thermoplastics and a precursor for biologically active compounds and was recently produced from glucose by microbial fermentation. To produce caffeic acid from inedible cellulose, separate hydrolysis and fermentation (SHF) and simultaneous saccharification and fermentation (SSF) reactions were compared using kraft pulp as lignocellulosic feedstock. Here, a tyrosine-overproducing Escherichia coli strain was metabolically engineered to produce caffeic acid from glucose by introducing the genes encoding a 4-hydroxyphenyllactate 3-hydroxylase (hpaBC) from Pseudomonas aeruginosa and tyrosine ammonia lyase (fevV) from Streptomyces sp. WK-5344. Using the resulting recombinant strain, the maximum yield of caffeic acid in SSF (233mg/L) far exceeded that by SHF (37.9mg/L). In the SSF with low cellulase loads (≤2.5 filter paper unit/g glucan), caffeic acid production was markedly increased, while almost no glucose accumulation was detected, indicating that the E. coli cells experienced glucose limitation in this culture condition. Caffeic acid yield was also negatively correlated with the glucose concentration in the fermentation medium. In SHF, the formation of by-product acetate and the accumulation of potential fermentation inhibitors increased significantly with kraft pulp hydrolysate than filter paper hydrolysate. The combination of these inhibitors had synergistic effects on caffeic acid fermentation at low concentrations. With lower loads of cellulase in SSF, less potential fermentation inhibitors (furfural, 5-hydroxymethyfurfural, and 4-hydroxylbenzoic acid) accumulated in the medium. These observations suggest that glucose limitation in SSF is crucial for improving caffeic acid yield, owing to reduced by-product formation and fermentation inhibitor accumulation.