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Captivate does not have this option. In Edit > Preferences > Defaults there are a couple of options to Autosize Buttons and Autosize Captions. But neither of these will automatically adjust the font size, only the physical size of the object required to accommodate the amount of text. Is that what you want?
I wanted to keep the object the same size and have Captivate automatically adjust the font size to fit the object. I think it's strange Captivate doesn't have this feature. O' well... just a little more work on my end. Thanks for the help!
To tell the truth, the existing Auto Adjust preferences have never been very popular. I always advise people to turn them off. It can be really annoying when you find that your carefully positioned and sized captions are changed just because you made some small edit later.
But if you think autosizing of fonts would be a good idea too, by all means log an enhancement request with Adobe. There's a link to the form page on this forum.