Metformin, a well‐known anti‐diabetic agent, is very effective in lowering blood glucose in patients with type 2 diabetes with minimal side‐effects. Metformin is also being recommended in the treatment of obesity and polycystic ovary syndrome. Metformin elicits its therapeutic effects mainly via activation of AMP‐activated kinase (AMPK) pathway. Renal cells under hyperglycemic or proteinuric conditions exhibit inactivation of cell defense mechanisms such as AMPK and autophagy, and activation of pathologic pathways such as mammalian target of rapamycin (mTOR), endoplasmic reticulum (ER) stress, epithelial‐to‐mesenchymal transition (EMT), oxidative stress, and hypoxia. As these pathologic pathways are intertwined with AMPK signaling, the potential benefits of metformin therapy in patients with type 2 diabetes would extend beyond its anti‐hyperglycemic effects. However, since metformin is eliminated unchanged through the kidneys and some studies have shown the incidence of lactic acidosis with its use during severe renal dysfunction, the use of metformin was contraindicated in patients with renal disease until recently. With more studies indicating the relatively low incidence of lactic acidosis and revealing the additional benefits with metformin therapy, the US FDA has now approved metformin to be administered in patients with established renal disease based on their renal function. The purpose of this review is to highlight the various mechanisms by which metformin protects renal cells that have lost its functionality in a diabetic or non‐diabetic setting and to enlighten the advantages and therapeutic potential of metformin as a nephroprotectant for patients with diabetic nephropathy and other non‐diabetic forms of chronic kidney disease. J. Cell. Physiol. 232: 731–742, 2017. © 2016 Wiley Periodicals, Inc. Metformin, a popular anti‐diabetic drug and an AMPK activator, modulates various signaling pathways altered in diabetic nephropathy and exhibits nephroprotective properties in various animal models of diabetes. Additional studies in humans are needed to ascertain its therapeutic potential as a nephroprotectant to treat nephropathy in patients with diabetes.