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Considerable efforts have been made since the 1950s to better understand the cellular and molecular mechanisms of action of metformin, a potent antihyperglycaemic agent now recommended as the first-line oral therapy for T2D (Type 2 diabetes). The main effect of this drug from the biguanide family is to acutely decrease hepatic glucose production, mostly through a mild and transient inhibition of the mitochondrial respiratory chain complex I. In addition, the resulting decrease in hepatic energy status activates AMPK (AMP-activated protein kinase), a cellular metabolic sensor, providing a generally accepted mechanism for the action of metformin on hepatic gluconeogenesis. The demonstration that respiratory chain complex I, but not AMPK, is the primary target of metformin was recently strengthened by showing that the metabolic effect of the drug is preserved in liver-specific AMPK-deficient mice. Beyond its effect on glucose metabolism, metformin has been reported to restore ovarian function in PCOS (polycystic ovary syndrome), reduce fatty liver, and to lower microvascular and macrovascular complications associated with T2D. Its use has also recently been suggested as an adjuvant treatment for cancer or gestational diabetes and for the prevention in pre-diabetic populations. These emerging new therapeutic areas for metformin will be reviewed together with recent findings from pharmacogenetic studies linking genetic variations to drug response, a promising new step towards personalized medicine in the treatment of T2D.