Type II (non-insulin dependent) diabetes is associated with a high incidence of vascular disease that causes morbidity and mortality. The principal organs affected by this process are the heart, brain and lower limbs. For many years it has been proposed that depression of the fibrinolytic system, which acts to maintain patency of blood vessels, may contribute to the development of vascular disease. A number of pharmacological agents have been shown to enhance circulating fibrinolytic activity of which metformin is perhaps the most interesting because of its low incidence of serious side effects. Early studies with metformin demonstrated an increase in global fibrinolytic activity in patients with coronary artery disease, peripheral vascular disease and diabetes. Recent studies using assays specific for the components of the fibrinolytic system have shown that the effects of metformin are to cause a fall in plasma levels of the fibrinolytic inhibitor, plasminogen activator inhibitor-1 (PAI-1). There is evidence to suggest that the relationship between depressed fibrinolysis and vascular disease is due to high levels of PAI-1, and reasons to believe that a lowering of PAI-1 may be beneficial in this respect. Further studies are warranted to evaluate the long term effects of metformin warranted to evaluate the long term effects of metformin on the incidence of vascular disease in diabetic patients.