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Recent epidemiological investigations conducted in diabetic cohorts and cancer patients have found that metformin users have lower risks for cancer than those using insulin or insulin secretagogues. Studies conducted in various animal tumor models and cancer cell lines have demonstrated that metformin prevents tumor development or inhibits cell proliferation. In addition, a recent clinical trial has shown that short-term use of metformin reduces aberrant crypt foci (ACF) formation in non-diabetic patients with ACF. The antitumor activity of metformin may be mediated through its regulatory effect on hormonal, metabolic, and immune functions. Metformin achieves glycemic control by reducing hepatic glucose production and increasing the muscle intake of glucose, thus lowering levels of circulating glucose and, consequently, insulin. The major molecular targets of metformin are the liver kinase B1 (LKB1)-AMP-activated protein kinase (AMPK) signaling and mammalian target of rapamycin (mTOR) pathways, which are central in the regulation of cellular energy homeostasis and play a crucial role in the control of cell division and cell proliferation. Metformin has been shown to improve endothelial function, decrease inflammatory activity, and regulate immune function. Increasing experimental evidence provides a strong biological rationale for metformin as an antitumor and chemopreventive agent. Metformin is being tested as an adjuvant cancer therapy in clinical settings, and metformin is recommended for all cases of Type 2 diabetes without contraindications. As described in this review, the chemopreventive value of metformin is not restricted to diabetic or obese individuals.