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Abstract Aims To define the number of people in Tayside, Scotland (population 349 303) with Type 2 diabetes who use metformin, the incidence of contraindications to its continued use in these people and the proportion that discontinued metformin treatment following the development of a contraindication. Methods Retrospective cohort study of the incidence of contraindications to metformin in all patients with Type 2 diabetes using metformin from January 1993 to June 1995. The contraindications of acute myocardial infarction, cardiac failure, renal impairment and chronic liver disease were identified by: the regional diabetes information system, biochemistry database and hospital admissions database and a database of all encashed community prescriptions. Results One thousand eight hundred and forty seven subjects (26.3% of those with Type 2 diabetes) redeemed prescriptions for metformin. Of these, 3.5% were admitted with an acute myocardial infarction (71 episodes); 4.2% were admitted with cardiac failure (114 episodes); 21.0% received metformin and loop diuretics for cardiac failure concurrently; 4.8% developed renal impairment; and 2.8% developed chronic liver disease. The development of contraindications rarely resulted in discontinuation of metformin, for example only 17.5% and 25% stopped metformin after admission with acute myocardial infarction and development of renal impairment, respectively. In total, 24.5% of subjects receiving metformin, 6.4% of all people with Type 2 diabetes, had contraindications to its use. There was one episode of lactic acidosis in 4600 patient years. Conclusions This population-based study shows that 24.5% of patients prescribed metformin have contraindications to its use. Development of contraindications rarely results in discontinuation of metformin therapy. Despite this, lactic acidosis remains rare. Diabet. Med. 18, 483–488 (2001). [ABSTRACT FROM AUTHOR]