Metformin, a biguanide antidiabetic agent that can be administered either alone or in combination with sulfonylureas, has been extensively used in Europe and Canada. The mechanism of action of metformin and other biguanides is not completely understood, but recent in vitro and in vivo studies suggest that metformin may act in part by both increasing the binding of insulin to its receptor and potentiating insulin action. Metformin, because of its chemical structure, does not interact with the liver and has a short half-life. Consequently, lactic acidosis, which is a rare complication of metformin, has not been associated with the proper use of this drug. In addition to its antidiabetic actions, metformin causes weight loss in obese diabetic patients and may be useful in managing associated lipid disorders.