C-peptide has long been thought to be an inert byproduct of insulin production, but it has become apparent, and accepted, that C-peptide has important biological properties. C-peptide displays beneficial effects in many tissues affected by diabetic complications, such as increased peripheral blood flow and protection from renal damage. However, the mechanisms mediating these effects remain unclear. C-peptide interacts with cellular membranes at unidentified sites distinctive of the insulin family of receptors, and signals to multiple targets known to play a role in diabetes and diabetic complications, such as Na(+)/K(+)-ATPase and NOS. In general, the physiological and molecular effects of C-peptide resemble insulin, but C-peptide also possesses traits separate from those of insulin. These basic studies have been confirmed in human studies, suggesting that C-peptide may lend itself to clinical applications. However, the molecular and physiological properties of C-peptide are not completely elucidated, and large clinical studies have not begun. In order to further these goals, we critically summarize the current state of knowledge regarding C-peptide's renal and vascular effects and the molecular signaling of C-peptide.