Diabetes mellitus is the commonest cause of end-stage renal failure in both Australia and New Zealand. In addition, the burden of diabetes is prominent in those with chronic kidney disease who have not yet reached the requirement for renal replacement therapy. While diabetes is associated with a higher incidence of mortality and morbidity in all populations studied with kidney disease, little is known about optimal treatment strategies for hyperglycaemia and the effects of glycaemic treatment in this large group of patients. Metformin is recommended as the drug of first choice in patients diagnosed with type 2 diabetes in the USA, Europe and Australia. There are potential survival benefits associated with the use of metformin in additional to recent studies suggesting benefits in respect to cardiovascular outcomes and metabolic parameters. The use of metformin has been limited in patients with renal disease because of the perceived risk of lactic acidosis; however, it is likely that use of this drug would be beneficial in many with chronic kidney disease. Thus the potential benefits and harms of metformin are outlined in this review with suggestions for its clinical use in those with kidney disease.