After studies in Scotland and at Oxford, Caird served as a tutor at Merton College, Oxford, from 1864 to 1866. He was professor of moral philosophy at Glasgow University from 1866 to 1893 and master of Balliol College, Oxford, from 1893 to 1907, when paralysis forced his retirement.

As one of the most influential British exponents of German Idealist philosophy along Hegelian lines, Caird joined his friend T.H. Green (Green, T H), an Oxford professor, in founding the movement in Britain. While Green concentrated on the ethical implications of Hegel's system, Caird applied its principles to the interpretation of philosophy and theology. Also devoted to the philosophy of Immanuel Kant, Caird wrote A Critical Account of the Philosophy of Kant (1877) and The Critical Philosophy of Immanuel Kant, 2 vol. (1889). Believing that “the greatest theme of modern philosophy is the problem of the relation of the human to the divine,” Caird also wrote numerous works in religion, among them The Evolution of Religion, 2 vol. (1893), and The Evolution of Theology in the Greek Philosophers, 2 vol. (1904).