The mechanism for how metformin activates AMPK (AMP-activated kinase) was investigated in isolated skeletal muscle L6 cells. A widely held notion is that inhibition of the mitochondrial respiratory chain is central to the mechanism. We also considered other proposals for metformin action. As metabolic pathway markers, we focused on glucose transport and fatty acid oxidation. We also confirmed metformin actions on other metabolic processes in L6 cells. Metformin stimulated both glucose transport and fatty acid oxidation. The mitochondrial Complex I inhibitor rotenone also stimulated glucose transport but it inhibited fatty acid oxidation, independently of metformin. The peroxynitrite generator 3-morpholinosydnonimine stimulated glucose transport, but inhibited fatty acid oxidation. Addition of the nitric oxide precursor arginine to cells did not affect glucose transport. These studies differentiate metformin from inhibition of mitochondrial respiration and from active nitrogen species. Knockdown of adenylate kinase also failed to affect metformin stimulation of glucose transport. Hence, any means of increase in ADP appears not to be involved in the metformin mechanism. Knockdown of LKB1, an upstream kinase and AMPK activator, did not affect metformin action. Having ruled out existing proposals, we suggest a new one: metformin might increase AMP through inhibition of AMP deaminase (AMPD). We found that metformin inhibited purified AMP deaminase activity. Furthermore, a known inhibitor of AMPD stimulated glucose uptake and fatty acid oxidation. Both metformin and the AMPD inhibitor suppressed ammonia accumulation by the cells. Knockdown of AMPD obviated metformin stimulation of glucose transport. We conclude that AMPD inhibition is the mechanism of metformin action.