Metformin improves glucose regulation, lowers insulin resistance and protects against weight gain and cardiovascular disease. New insights are emerging into the kinetics and mechanisms of action of metformin. Metformin moderates mitochondrial energy metabolism. It decreases gluconeogenesis through inhibition of the mitochondrial enzyme mitochondrial glycerophosphate dehydrogenase. Inhibition of mitochondrial enzymes lowers cellular energy levels, leading to activation of the enzyme AMP-activated protein kinase (AMPK), an important cellular energy sensor. Activation of this enzyme leads to several important effects, resulting in improved insulin sensitivity through reduced lipogenesis and in a decrease in bile acid resorption in the gut. Metformin protects against cardiovascular disease through improved glucose regulation, counteracting hyperinsulinemia and through direct effects on the vascular wall. In addition, metformin may also have beneficial effects on cancer incidence and mortality by lowering hyperinsulinemia and by inhibition of the enzyme mTOR and the transcriptional factor NF-κB via activation of AMPK.