Obestatin, a novel 23 amino acid amidated peptide encoded by the same gene with ghrelin, was initially reported to reduce food intake, body weight gain, gastric emptying and suppress intestinal motility through an interaction with the orphan receptor GPR39. However, recently reports have shown that above findings had been questioned by several groups. Further studies explained that obestatin was involved in inhibiting thirst and anxiety, improving memory, regulating sleep, affecting cell proliferation, and increasing the secretion of pancreatic juice enzymes. We also identified that obestatin could stimulate piglet liver and adipose cell proliferation, and inhibit the secretion of IGF-I. According to the controversy over the effects and the cognate ligand of obestatin, here we provide the latest review on the structure, distribution and physiological functions of obestatin.