Metformin, a biguanide, has been available in the US for the treatment of type 2 diabetes mellitus for nearly 8 years. Over this period of time, it has become the most widely prescribed antihyperglycaemic agent. Its mechanism of action involves the suppression of endogenous glucose production, primarily by the liver. Whether the drug actually has an insulin sensitising effect in peripheral tissues, such as muscle and fat, remains somewhat controversial. Nonetheless, because insulin levels decline with metformin use, it has been termed an 'insulin sensitiser'. Metformin has also been shown to have several beneficial effects on cardiovascular risk factors and it is the only oral antihyperglycaemic agent thus far associated with decreased macrovascular outcomes in patients with diabetes. Cardiovascular disease, impaired glucose tolerance and the polycystic ovary syndrome are now recognised as complications of the insulin resistance syndrome, and there is growing interest in the management of this extraordinarily common metabolic disorder. While diet and exercise remain the cornerstone of therapy for insulin resistance, pharmacological intervention is becoming an increasingly viable option. We review the role of metformin in the treatment of patients with type 2 diabetes and describe the additional benefits it provides over and above its effect on glucose levels alone. We also discuss its potential role for a variety of insulin resistant and prediabetic states, including impaired glucose tolerance, obesity, polycystic ovary syndrome and the metabolic abnormalities associated with HIV disease.