Melatonin, originally discovered as a hormone of the pineal gland, is produced by bacteria, protozoa, plants, fungi, invertebrates, and various extrapineal sites of vertebrates, including gut, skin, Harderian gland, and leukocytes. Biosynthetic pathways seem to be identical. Actions are pleiotropic, mediated by membrane and nuclear receptors, other binding sites or chemical interactions. Melatonin regulates the sleep/wake cycle, other circadian and seasonal rhythms, and acts as an immunostimulator and cytoprotective agent. Circulating melatonin is mostly 6-hydroxylated by hepatic P450 monooxygenases and excreted as 6-sulfatoxymelatonin. Pyrrole-ring cleavage is of higher importance in other tissues, especially the brain. The product, N1-acetyl-N2-formyl-5-methoxykynuramine, is formed by enzymatic, pseudoenzymatic, photocatalytic, and numerous free-radical reactions. Additional metabolites result from hydroxylation and nitrosation. The secondary metabolite, N1-acetyl-5-methoxykynuramine, supports mitochondrial function and downregulates cyclooxygenase 2. Antioxidative protection, safeguarding of mitochondrial electron flux, and in particular, neuroprotection, have been demonstrated in many experimental systems. Findings are encouraging to use melatonin as a sleep promoter and in preventing progression of neurodegenerative diseases.