Metformin is a biguanide antidiabetic medication, that has been in use for over 30 years. Its mechanism of action, unknown until a few years ago, is now linked to an improved peripheral sensitivity to insulin, through a stimulated tissue glucose uptake by a transporter linked system. Interest in metformin has been revived by the recent observation of a specific activity of this agent on some of the major traits of the so called 'polymetabolic syndrome' (or 'syndrome X'), characterized by: insulin resistance, hypertriglyceridemia, hypertension and reduced fibrinolytic activity. Metformin, in studies examining one or more of these, has been shown, possibly through its peripheral insulin sensitizing mechanism, to correct most of the major symptoms characterizing this insulin resistance syndrome. Metformin, similarly to the other biguanide phenformin, has been rated as potentially dangerous, because of the possible induction of lactic acidosis, in some cases with a fatal outcome. Metformin is, however, associated with a very low incidence of lactic acidosis because, differently from phenformin, it does not undergo liver metabolism and, as a consequence, there are no high-risk groups, displaying an impaired metabolic handling. In this review, in addition to an overall evaluation of the more recent data on the mechanism of action and clinical use of metformin, a detailed clinical analysis of all published cases of lactic acidosis is provided. These data indicate that the risk in metformin use is negligible, provided that care is taken when prescribing the drug to patients with suspected clinical risks of lactic acidosis.