Bone tissue engineering is a promising approach that uses seed-cell-scaffold drug delivery systems to reconstruct bone defects caused by trauma, tumors, or other diseases (e.g., periodontitis). Metformin, a widely used medication for type II diabetes, has the ability to enhance osteogenesis and angiogenesis by promoting cell migration and differentiation. Metformin promotes osteogenic differentiation, mineralization, and bone defect regeneration via activation of the AMP-activated kinase (AMPK) signaling pathway. Bone tissue engineering depends highly on vascular networks for adequate oxygen and nutrition supply. Metformin also enhances vascular differentiation via the AMPK/mechanistic target of the rapamycin kinase (mTOR)/NLR family pyrin domain containing the 3 (NLRP3) inflammasome signaling axis. This is the first review article on the effects of metformin on stem cells and bone tissue engineering. In this paper, we review the cutting-edge research on the effects of metformin on bone tissue engineering. This includes metformin delivery via tissue engineering scaffolds, metformin-induced enhancement of various types of stem cells, and metformin-induced promotion of osteogenesis, angiogenesis, and its regulatory pathways. In addition, the dental, craniofacial, and orthopedic applications of metformin in bone repair and regeneration are also discussed.