Although metformin is an important antidiabetic, its mechanism of action is still unknown. To study its mechanism, we examined metformin stimulation of insulin action on the Xenopus oocyte. Similar to therapeutic concentrations, maximal stimulation of insulin-induced meiotic cell division was achieved at about 1-10 microg/ml (or 7.7-77 /microM) metformin. An equivalent concentration of metformin was required to elevate receptor tyrosine kinase activity (in whole cells or a membrane-cortex preparation) and, through this tyrosine kinase activation, inositol 1,4,5-trisphosphate (IP3) production. With whole cells, the preincubation time for metformin stimulation of insulin action (approximately 1 h) was equivalent to the time required for metformin to maximize tyrosine phosphorylation and raise IP3, levels. With the membrane-cortex preparation, metformin was active within minutes; thus, metformin may act at an intracellular site. Since metformin can increase IP3, mass, we prevented elevation of calcium by prior microinjection of a calcium chelator or heparin (a drug that inhibits IP3 binding to the IP3 receptor). Both the chelator and heparin blocked metformin stimulation of insulin action on whole cells. Since microinjection of IP3, also stimulates insulin action, metformin may stimulate insulin action by elevation of intracellular calcium in addition to activation of the receptor tyrosine kinase.