Metformin is an oral biguanide commonly used for treating type II diabetes and has recently been reported to possess antiproliferative properties that can be exploited for the prevention and treatment of a variety of cancers. The mechanisms underlying this effect have not been fully elucidated. Our study shows a marked loss of AMP‐activated protein kinase (AMPK) phosphorylation and nuclear human Forkhead box O1 (FOXO1) protein in estrogen‐dependent endometrial cancer (EC) tumors compared to normal control endometrium. Metformin treatment suppressed EC cell growth in a time‐dependent manner in vitro; this effect was cancelled by cotreatment with an AMPK inhibitor, compound C. Metformin decreased FOXO1 phosphorylation and increased FOXO1 nuclear localization in Ishikawa and HEC‐1B cells, with non‐significant increase in FOXO1 mRNA expression. Moreover, compound C blocked the metformin‐induced changes of FOXO1 and its phosphorylation protein, suggesting that metformin upregulated FOXO1 activity by AMPK activation. Similar results were obtained after treatment with insulin. In addition, transfection with siRNA for FOXO1 cancelled metformin‐inhibited cell growth, indicating that FOXO1 mediated metformin to inhibit EC cell proliferation. A xenograft mouse model further revealed that metformin suppressed HEC‐1B tumor growth, accompanied by downregulated ki‐67 and upregulated AMPK phosphorylation and nuclear FOXO1 protein. Taken together, these data provide a novel mechanism of antineoplastic effect for metformin through the regulation of FOXO1, and suggest that the AMPK–FOXO1 pathway may be a therapeutic target to the development of new antineoplastic drugs. Metformin may exert its anti‐proliferative effect on EC cells by activating AMPK and thus decreasing phosphorylation of FOXO1 protein, thereby triggering the relocalization of FOXO1 protein from the cytoplasm to the nucleus and resulting in increased FOXO1 activity. This study provide a novel mechanism of anti‐neoplastic effect for metformin through the regulation of FOXO1, and suggest that AMPK‐FOXO1 pathway may be a therapeutic target to the development of new anti‐neoplastic drugs.