Maintaining sufficient levels of ATP (the immediate source of cellular energy) is essential for the proper functioning of all living cells. As a consequence, cells require mechanisms to balance energy demand with supply. In eukaryotic cells the AMP-activated protein kinase (AMPK) cascade has an important role in this homeostasis. AMPK is activated by a fall in ATP (concomitant with a rise in ADP and AMP), which leads to the activation of catabolic pathways and the inhibition of anabolic pathways. Here we review the role of AMPK as an energy sensor and consider the recent finding that ADP, as well as AMP, causes activation of mammalian AMPK. We also review recent progress in structural studies on phosphorylated AMPK that provides a mechanism for the regulation of AMPK in which AMP and ADP protect it against dephosphorylation. Finally, we briefly survey some of the outstanding questions concerning the regulation of AMPK.