The anti-diabetic drug metformin is rapidly emerging as a potential anti-cancer agent. Metformin, effective in treating type 2 diabetes and the insulin resistance syndromes, improves insulin resistance by reducing hepatic gluconeogenesis and by enhancing glucose uptake by skeletal muscle. Epidemiological studies have consistently associated metformin use with decreased cancer incidence and cancer-related mortality. Furthermore, numerous preclinical and clinical studies have demonstrated anti-cancer effects of metformin, leading to an explosion of interest in evaluating this agent in human cancer. The effects of metformin on circulating insulin levels indicate a potential efficacy towards cancers associated with hyperinsulinaemia; however, metformin may also directly inhibit tumour growth. In this review, we describe the mechanism of action of metformin and summarise the epidemiological, clinical and preclinical evidence supporting a role for metformin in the treatment of cancer. In addition, the challenges associated with translating preclinical results into therapeutic benefit in the clinical setting will be discussed.