• The widely used diabetes drug metformin improves hematopoiesis and delays tumor formation in a preclinical murine model of FA.• Metformin reduces DNA damage in human FA patient-derived cells.Fanconi anemia (FA) is an inherited bone marrow failure disorder associated with a high incidence of leukemia and solid tumors. Bone marrow transplantation is currently the only curative therapy for the hematopoietic complications of this disorder. However, long-term morbidity and mortality remain very high, and new therapeutics are badly needed. Here we show that the widely used diabetes drug metformin improves hematopoiesis and delays tumor formation in Fancd2 2/2 mice. Metformin is the first compound reported to improve both of these FA phenotypes. Importantly, the beneficial effects are specific to FA mice and are not seen in the wild-type controls. In this preclinical model of FA, metformin outperformed the current standard of care, oxymetholone, by improving peripheral blood counts in Fancd2 2/2 mice significantly faster. Metformin increased the size of the hematopoietic stem cell compartment and enhanced quiescence in hematopoietic stem and progenitor cells. In tumor-prone Fancd2 2/2 Trp53 1/2 mice, metformin delayed the onset of tumors and significantly extended the tumor-free survival time. In addition, we found that metformin and the structurally related compound aminoguanidine reduced DNA damage and ameliorated spontaneous chromosome breakage and radials in human FA patient-derived cells. Our results also indicate that aldehyde detoxification might be one of the mechanisms by which metformin reduces DNA damage in FA cells. (Blood. 2016; 128(24):2774-2784