OBJECTIVE - The antidiabetic properties of metformin are mediated through its ability to activate the AMP-activated protein kinase (AMPK). Activation of AMPK can suppress tumor formation and inhibit cell growth in addition to lowering blood glucose levels. We tested the hypothesis that metformin reduces the risk of cancer in people with type 2 diabetes. RESEARCH DESIGN AND METHODS - In an observational cohort study using record-linkage databases and based in Tayside, Scotland, U.K., we identified people with type 2 diabetes who were new users of metformin in 1994-2003. We also identified a set of diabetic comparators, individually matched to the metformin users by year of diabetes diagnosis, who had never used metformin. In a survival analysis we calculated hazard ratios for diagnosis of cancer, adjusted for baseline characteristics of the two groups using Cox regression. RESULTS - Cancer was diagnosed among 7.3% of 4,085 metformin users compared with 11.6% of 4,085 comparators, with median times to cancer of 3.5 and 2.6 years, respectively (P< 0.001). The unadjusted hazard ratio (95% CI) for cancer was 0.46 (0.40-0.53). After adjusting for sex, age, BMI, A1C, deprivation, smoking, and other drug use, there was still a significantly reduced risk of cancer associated with metformin: 0.63 (0.53- 0.75). CONCLUSIONS - These results suggest that metformin use may be associated with a reduced risk of cancer. A randomized trial is needed to assess whether metformin is protective in a population at high risk for cancer.