Obestatin is a 23-amino acid C-terminally amidated gastrointestinal peptide derived from preproghrelin and which forms an α helix. Although obestatin has a short biological half-life and is rapidly degraded, it is proposed to exert wide-ranging pathophysiological actions. Whilst the precise nature of many of its effects is unclear, accumulating evidence supports positive actions on both metabolism and cardiovascular function. For example, obestatin has been reported to inhibit food and water intake, body weight gain and gastrointestinal motility and also to mediate promotion of cell survival and prevention of apoptosis. Obestatin-induced increases in beta cell mass, enhanced adipogenesis and improved lipid metabolism have been noted along with up-regulation of genes associated with beta cell regeneration, insulin production and adipogenesis. Furthermore, human circulating obestatin levels generally demonstrate an inverse association with obesity and diabetes, whilst the peptide has been shown to confer protective metabolic effects in experimental diabetes, suggesting that it may hold therapeutic potential in this setting. Obestatin also appears to be involved in blood pressure regulation and to exert beneficial effects on endothelial function, with experimental studies indicating that it may also promote cardioprotective actions against, for example, ischaemia–reperfusion injury. This review will present a critical appraisal of the expanding obestatin research area and discuss the emerging therapeutic potential of this peptide for both metabolic and cardiovascular complications of diabetes.