Identification of the natural metabolic factors that are able to normalize insulin sensitivity and carbohydrate and lipid metabolism is necessary for the development of pharmacological approaches for the correction of obesity and Type II diabetes. Fibroblast growth factor 21 (FGF21) is an atypical member of the FGF family that functions as an endocrine hormone which regulates carbohydrate and lipid metabolism. It is involved in maintaining of energy homeostasis and adaptation to starvation and low temperature. In rodents, FGF21 administration increases energy expenditure, reduces body weight, fat mass, blood glucose and insulin levels, and improves insulin sensitivity. Pharmacologically, FGF21 is a promising new clinical candidate for the treatment of diabetes and obesity. This review highlights recent advances in our understanding ofmechanisms of FGF21's physiologic and pharmacologic anti-diabetic actions.