Whose courtesy name was Jingzhong, Cai was born in Guiyang county (now Leiyang city, Hunan province) in the Eastern Han Dynasty (25-220).

In 75, the time period under Emperor Liu Zhuang's regime, he became a eunuch in Luoyang's palace.

In 80, the time period under Emperor Liu Da's regime, he served as Xiaohuangmen (a kind of eunuch) in Changqiu palace.

In 88, when Liu Zhao ascended to the throne and became the emperor, Cai was promoted to Zhongchang servant. After four years, Cai was appointed to be Shangfang Ling (an official in charge of the royal workshop).

After more than 10 years of research and trials, Cai finally invented the plant fiber paper made of bark, hemp, rag and fish net. As a totally new writing material, it replaced the heavy bamboo slips and expensive silk.

In October 105, he presented paper to the emperor. The emperor appreciated his talent very much and began to popularize his paper. People all over the country call it "Cai Hou paper".

In 114, the first year under Emperor Liu Hu's regime, empress dowager Deng granted him the title of Marquis of Longting as he had served five emperors and made great contributions to the invention of paper and later, she honored him the title of elderly servant of Changle.

After the death of Deng in 121, Emperor Liu Hu rose to power. Cai was implicated in the case of Song Guiren, the grandmother of Liu Hu. Cai took poison and killed himself in his fief Longting and died at the age of 59. In 151, Emperor Liu Zhi redressed Cai's case, repaired his tomb and built a temple for him.