Metformin is a major oral anti-diabetic drug and is known as an insulin sensitizer. However, the mechanism by which metformin acts is unclear. In this study, we found that AICAR, an AMPK activator, and metformin increased the expression of Rab4 mRNA and protein levels in skeletal muscle C2C12 cells. The promoter activity of Rab4 was increased by metformin in an AMPK-dependent manner. Metformin stimulated the phosphorylation of AS160, Akt substrate, and Rab GTPase activating protein (GAP), and also increased the phosphorylation of PKC-zeta, which is a critical molecule for glucose uptake. Knockdown of AMPK blocked the metformin-induced phosphorylation of AS160/PKC-zeta. In addition, a colorimetric absorbance assay showed that insulin-induced translocation of GLUT4 was suppressed in Rab4 knockdown cells. Moreover, Rab4 interacted with PKC-zeta but not with GLUT4. The C-terminal-deleted Rab4 mutant, Rab4ΔCT, showed diffuse sub-cellular localization, while wild-type Rab4 localized exclusively to the perinuclear membrane. Unlike Rab4ΔCT, wild-type Rab4 co-localized with PKC-zeta. Together, these results demonstrate that metformin induces Rab4 expression via AMPK-AS160-PKC-zeta and modulates insulin-mediated GLUT4 translocation. J. Cell. Physiol. 226: 974–981, 2011. © 2010 Wiley-Liss, Inc.