For many years metformin has been the gold standard in the treatment of type 2 diabetes. According to recommendations of the most important diabetes associations, this is the first-choice drug for use as monotherapy in patients with newly diagnosed type 2 diabetes. Metformin is also recommended in combined treatment when monotherapy is no longer effective. It is then combined with a sulfony-lurea, an incretin, flozin, or insulin, irrespective of the number of insulin injections per day. Besides its properties used in the treatment of diabetes, metformin has been treated for some time as a drug of a so-called pleiotropic activity, as each year brings new reports about its favourable effect in different conditions. At present, the scope of reimbursed indications of this drug has been expanded to include prediabetes, insulin resistance syndromes, and polycystic ovary syndrome. Metformin does not stimulate insulin secretion by the beta cells of the pancreas, and thus it is a drug that does not cause hypoglycaemia. The blood glucose-lowering effect of the drug is a consequence of hepatic glucose production inhibition, and of peripheral tissue (muscle tissue, fatty tissue) sensitisation to the effect of insulin of both endogenous and exogenous origin. The exact mechanism of metformin action at the cellular level remained unknown for a long time. Studies performed in recent years have provided a great deal of information that enables better understanding of the mechanism of action of the drug as well as the clinical effects resulting from its use. Metformin, besides improvement of glycaemia, is neutral to body weight, is cardioprotective, improves lipid profile, and has a probable anti-cancer effect. Metformin accumulation in the intestinal mucosa may interfere with FDG (18F-deoxyglucose) PET-CT image assessment. The aim of this article is a detailed discussion of metformin properties, its mechanisms of action, and clinical effects.