The effect of metformin on glucose metabolism was examined in eight obese (percent ideal body weight, 151 ± 9%) and six lean (percent ideal body weight, 104 ± 4%) noninsulin-dependent diabetic (NIDD) subjects before and after 3 months of metformin treatment (2.5 g/day). Fasting plasma glucose (11.5–8.8 mmol/L), hemoglobin-Aic (9.8–7.7%), oral glucose tolerance test response (20.0–17.0 mmol/L; peak glucose), total cholesterol (5.67–4.71 mmol/L), and triglycerides (2.77– 1.52 mmol/L) uniformly decreased (P < 0.05–0.001) after metformin treatment; fasting plasma lactate increased slightly from baseline (1.4 to 1.7 mmol/L; P – NS). Body weight decreased by 5 kg in obese NIDD subjects, but remained constant in lean NIDD. Basal hepatic glucose production declined in all diabetics from 83 to 61 mg/m2· min (P < 0.01), and the decrease correlated (r = 0.80; P < 0.01) closely with the fall in fasting glucose concentration. Fasting insulin (115 to 79 pmol/L) declined (P < 0.05) after metformin. During a 6.9 mmol/L hyperglycemic clamp, glucose uptake increased in every NIDD subject (113 ± 15 to 141 ± 12 mg/m2-min; P < 0.001) without a change in the plasma insulin response. During a euglycemic insulin clamp, total glucose uptake rose in obese NIDD subjects (121 ± 10 to 146 ± 9 mmol/m2–min; P < 0.05), but decreased slightly in lean NIDD (121 ± 10 to 146 ± 0.5; P = NS). Hepatic glucose production was suppressed by more than 80–90% in all insulin clamp studies before and after metformin treatment. In conclusion, metformin lowers the fasting plasma glucose and insulin concentrations, improves oral glucose tolerance, and decreases plasma lipid levels independent of changes in body weight. The improvement in fasting glucose results from a reduction in basal hepatic glucose production. Metformin per se does not enhance tissue sensitivity to insulin in NIDD subjects. The improvement in glucose metabolism under hyperglycemic, but not euglycemic, conditions suggests that metformin augments glucose-mediated glucose uptake. Metformin has no stimulatory effect on insulin secretion.