Melatonin, which is synthesized in the pineal gland and other tissues, has a variety of physiological, immunological, and biochemical functions. It is a direct scavenger of free radicals and has indirect antioxidant effects due to its stimulation of the expression and activity of antioxidative enzymes such as glutathione peroxidase, superoxide dismutase and catalase, and NO synthase, in mammalian cells. Melatonin also reduces serum lipid levels in mammalian species, and helps to prevent oxidative stress in diabetic subjects. Long-term melatonin administration to diabetic rats reduced their hyperlipidemia and hyperinsulinemia, and restored their altered ratios of polyunsaturated fatty acid in serum and tissues. It was recently reported that melatonin enhanced insulin-receptor kinase and IRS-1 phosphorylation, suggesting the potential existence of signaling pathway cross-talk between melatonin and insulin. Because TNF-[alpha] has been shown to impair insulin action by suppressing insulin receptor-tyrosine kinase activity and its IRS-1 tyrosine phosphorylation in peripheral tissues such as skeletal muscle cells, it was speculated that melatonin might counteract TNF-[alpha]-associated insulin resistance in type 2 diabetes. This review will focus on the physiological and metabolic effects of melatonin and highlight its potential use for the treatment of cholesterol/lipid and carbohydrate disorders.