Cai Yuan was born in 1956 in Nanjing, China, and grew up during the Cultural Revolution. He studied at the Nanjing College of Art before emigrating to the United Kingdom in 1983. He later obtained a First Class Honours degree from Chelsea College of Art & Design and an MA in Painting from the Royal College of Art in London.

Cai has exhibited nationally and internationally at major institutions including Tate Modern, the British Museum, the Victoria and Albert Museum, the Ashmolean Museum, the Ullens Center for Contemporary Art in Beijing, the Louisiana Museum of Modern Art in Denmark, ZKM in Germany, and the Gwangju Museum of Art in South Korea. He has also participated in several international biennales, including Liverpool, Prague, and Thessaloniki.

In the 1990s, he became widely known for his performance practice, which received extensive coverage in the national media. He is co-founder of the performance duo Mad For Real, co-founder of the Office of Contemporary Chinese Art (OCCA), and a trustee of the LYC Foundation. In 1995, he co-organised the first touring exhibition of Chinese artists in Britain, Journeys West.