Although metformin is widely used for the treatment of non-insulin-dependent diabetes, its mode of action remains unclear. Here we provide evidence that its primary site of action is through a direct inhibition of complex 1 of the respiratory chain. Metformin(50 microM) inhibited mitochondrial oxidation of glutamate+malate in hepatoma cells by 13 and 30% after 24 and 60 h exposure respectively, but succinate oxidation was unaffected. Metformin also caused time-dependent inhibition of complex 1 in isolated mitochondria, whereas in sub-mitochondrial particles inhibition was immediate but required very high metformin concentrations (K(0.5),79 mM). These data are compatible with the slow membrane-potential-driven accumulation of the positively charged drug within the mitochondrial matrix leading to inhibition of complex 1. Metformin inhibition of gluconeogenesis from L-lactate in isolated rat hepatocytes was also time- and concentration-dependent, and accompanied by changes in metabolite levels similar to those induced by other inhibitors of gluconeogenesis acting on complex 1. Freeze-clamped livers from metformin-treated rats exhibited similar changes in metabolite concentrations. We conclude that the drug's pharmacological effects are mediated, at least in part, through a time-dependent, self-limiting inhibition of the respiratory chain that restrains hepatic gluconeogenesis while increasing glucose utilization in peripheral tissues. Lactic acidosis, an occasional side effect, canal so be explained in this way.