Recent studies have demonstrated that the anti-diabetic drug, metformin, can exhibit direct antitumoral effects, or can indirectly decrease tumor proliferation by improving insulin sensitivity. Despite these recent advances, the underlying molecular mechanisms involved in decreasing tumor formation are not well understood. In this study, we examined the antiproliferative role and mechanism of action of metformin in MCF-7 cancer cells treated with 10 mM of metformin for 24, 48, and 72 hours. Using BrdU and the MTT assay, it was found that metformin demonstrated an antiproliferative effect in MCF-7 cells that occurred in a time- and concentration-dependent manner. Flow cytometry was used to analyze markers of cell cycle, apoptosis, necrosis and oxidative stress. Exposure to metformin induced cell cycle arrest in G0-G1 phase and increased cell apoptosis and necrosis, which were associated with increased oxidative stress. Gene and protein expression were determined in MCF-7 cells by real time RT-PCR and western blotting, respectively. In MCF-7 cells metformin decreased the activation of IRβ, Akt and ERK1/2, increased p-AMPK, FOXO3a, p27, Bax and cleaved caspase-3, and decreased phosphorylation of p70S6K and Bcl-2 protein expression. Co-treatment with metformin and H2O2 increased oxidative stress which was associated with reduced cell number. In the presence of metformin, treating with SOD and catalase improved cell viability. Treatment with metformin resulted in an increase in p-p38 MAPK, catalase, MnSOD and Cu/Zn SOD protein expression. These results show that metformin has an antiproliferative effect associated with cell cycle arrest and apoptosis, which is mediated by oxidative stress, as well as AMPK and FOXO3a activation. Our study further reinforces the potential benefit of metformin in cancer treatment and provides novel mechanistic insight into its antiproliferative role.