Abnormally increased hepatic gluconeogenesis is a significant contributor to hyperglycemia in the fasting state in patients with type 2 diabetes mellitus (T2DM) due to insulin resistance. Metformin, the most prescribed drug for the treatment of T2DM, is believed to exert its effect mainly by reducing hepatic gluconeogenesis. Here, we discuss how increased hepatic gluconeogenesis contributes to T2DM and we review newly revealed mechanisms underlying the attenuation of gluconeogenesis by metformin. In addition, we analyze the recent findings on new determinants involved in the regulation of gluconeogenesis, which might ultimately lead to the identification of novel and targeted treatment strategies for T2DM.