Metformin, the first-line drug for treating diabetes, inhibits cellular transformation and selectively kills cancer stem cells in breast cancer cell lines. In a Src-inducible model of cellular transformation, metformin inhibits the earliest known step in the process, activation of the inflammatory transcription factor NF-κB. Metformin strongly delays cellular transformation in a manner similar to that occurring upon a weaker inflammatory stimulus. Conversely, inhibition of transformation does not occur if metformin is added after the initial inflammatory stimulus. The antitransformation effect of metformin can be bypassed by overexpression of Lin28B or IL1β, downstream targets of NF-κB. Metformin preferentially inhibits nuclear translocation of NF-κB and phosphorylation of STAT3 in cancer stem cells compared with non-stem cancer cells in the same population. The ability of metformin to block tumor growth and prolong remission in xenografts in combination with doxorubicin is associated with decreased function of the inflammatory feedback loop. Lastly, metformin-based combinatorial therapy is effective in xenografts involving inflammatory prostate and melanoma cell lines, whereas it is ineffective in noninflammatory cell lines from these lineages. Taken together, our observations suggest that metformin inhibits a signal transduction pathway that results in an inflammatory response. As metformin alters energy metabolism in diabetics, we speculate that metformin may block a metabolic stress response that stimulates the inflammatory pathway associated with a wide variety of cancers.