The United Kingdom Prospective Diabetes Study (UKPDS) found that metformin reduces macrovascular complications in type 2 diabetic patients. To investigate the mechanisms involved we examined the effect of metformin on monocyte adhesion to human endothelial cells (ECs) induced by advanced glycation end-products (AGE), and on monocyte differentiation into macrophages and foam cell formation. Treatment of human ECs with AGEs (100 µg/ml) for up to 12 hours significantly increased human monocyte adhesion. Pre-treatment of the cells with metformin (0.1—2.5 µg/ml) inhibited AGE-induced monocyte adhesion and expression of endothelial cell adhesion molecules. In culture, human monocytes spontaneously differentiated into macrophages, as indicated by phenotypic changes, and increased expression of lectin-like oxidised low-density lipoprotein (LDL) receptor and scavenger receptor type A. Incubation of these cells in the presence of metformin decreased expression of all of these parameters. Metformin also inhibited foam cell formation induced by minimally modified LDL. Overall, these results suggest new mechanisms by which metformin may reduce the risk of vascular complications in patients with type 2 diabetes.