Metformin is the first-line drug treatment for type 2 diabetes. Globally, over 100 million patients are prescribed this drug annually. Metformin was discovered before the era of target-based drug discovery and its molecular mechanism of action remains an area of vigorous diabetes research. An improvement in our understanding of metformin's molecular targets is likely to enable target-based identification of second-generation drugs with similar properties, a development that has been impossible up to now. The notion that 5' AMP-activated protein kinase (AMPK) mediates the anti-hyperglycaemic action of metformin has recently been challenged by genetic loss-of-function studies, thrusting the AMPK-independent effects of the drug into the spotlight for the first time in more than a decade. Key AMPK-independent effects of the drug include the mitochondrial actions that have been known for many years and which are still thought to be the primary site of action of metformin. Coupled with recent evidence of AMPK-independent effects on the counter-regulatory hormone glucagon, new paradigms of AMPK-independent drug action are beginning to take shape. In this review we summarise the recent research developments on the molecular action of metformin.