Metformin has been used for over 40 years as an effective glucose-lowering agent in type 2 (noninsulin-dependent) diabetes mellitus. Typically it reduces basal and postprandial hyperglycaemia by about 25% in more than 90% of patients when either given alone or coadministered with other therapies including insulin during a programme of managed care. Metformin counters insulin resistance and offers benefits against many features of the insulin resistance syndrome (Syndrome X) by preventing bodyweight gain, reducing hyperinsulinaemia and improving the lipid profile. In contrast to sulphonylureas, metformin does not increase insulin secretion or cause serious hypoglycaemia. Treatment of type 2 diabetes mellitus with metformin from diagnosis also offers greater protection against the chronic vascular complications of type 2 diabetes mellitus. The most serious complication associated with metformin is lactic acidosis which has an incidence of about 0.03 cases per 1000 patients years of treatment and a mortality risk of about 0.015 per 1000 patient-years. Most cases occur in patients who are wrongly prescribed the drug, particularly patients with impaired renal function (e.g. serum creatinine level > 130 micromol/L or > 1.5 g/L). Other major contraindications include congestive heart failure, hypoxic states and advanced liver disease. Serious adverse events with metformin are predictable rather than spontaneous and are potentially preventable if the prescribing guidelines are respected. Gastrointestinal adverse effects, notably diarrhoea, occur in less than 20% of patients and remit when the dosage is reduced. The life-threatening risks associated with metformin are rare and could mostly be avoided by strict adherence to the prescribing guidelines. Given the 4 decades of clinical experience with metformin, its antihyperglycaemic efficacy and benefits against Syndrome X, metformin offers a very favourable risk-benefit assessment when compared with the chronic morbidity and premature mortality among patients with type 2 diabetes mellitus.