Somatostatin (SOM) was originally isolated as the hypothalamic inhibitor of growth hormone release but was subsequently shown to have a widespread distribution including the gastrointestinal tract. In fact the gastrointestinal tract contains about 70% of the total body SOM. SOM has inhibitory actions on gastrointestinal exocrine and endocrine secretions, motility and blood flow. Within the gut it functions as an endocrine, paracrine, autocrine and neurocrine factor. SOM is released by a meal, and a number of neurotransmitters and regulatory peptides also influence SOM release. SOM is a key component of the gastrin-acid feedback loop as luminal acid releases SOM, which in turn has inhibitory effects on both gastrin and gastric acid. Consistent with the diverse functions of SOM, a number of different although related SOM receptors with distinct distribution patterns and intracellular mediators have been cloned and sequenced. SOM is the first of the gut regulatory peptides to have a significant therapeutic use. By inhibiting both the target cell (e.g. parietal cell) and the release of the active agent (e.g. gastrin) the therapeutic potential of SOM is magnified. To date most of the clinical experience has been with the one analogue, octreotide. This analogue has a longer half-life than SOM (hours versus minutes) but has only minimal oral activity, therefore requiring subcutaneous injections several times a day. The definite gastrointestinal applications include treatment of gastroenteropancreatic tumours. It is also becoming a favoured treatment for gastrointestinal fistulae, variceal bleeding and diarrhoea. However, octreotide has no consistent effect on tumour growth. The high density of SOM receptors on tumours has allowed localization of tumours using in vivo scintography with labelled octreotide. The sequencing of a variety of SOM receptors with different distributions and differing cellular effector systems raises the likelihood of developing SOM analogues for specific clinical applications.