Metformin is an effective agent with a good safety profile that is widely used as a first-line treatment for type 2 diabetes, yet its mechanisms of action and variability in terms of efficacy and side effects remain poorly understood. Although the liver is recognised as a major site of metformin pharmacodynamics, recent evidence also implicates the gut as an important site of action. Metformin has a number of actions within the gut. It increases intestinal glucose uptake and lactate production, increases GLP-1 concentrations and the bile acid pool within the intestine, and alters the microbiome. A novel delayed-release preparation of metformin has recently been shown to improve glycaemic control to a similar extent to immediate-release metformin, but with less systemic exposure. We believe that metformin response and tolerance is intrinsically linked with the gut. This review examines the passage of metformin through the gut, and how this can affect the efficacy of metformin treatment in the individual, and contribute to the side effects associated with metformin intolerance.