Women with polycystic ovarian syndrome are at increased risk of miscarriage. Although evidence exists that metformin reduces this risk, the mechanism is unknown. This study tests the hypothesis that AMP kinase (AMPK) activation with metformin directly improves insulin signaling within the blastocyst, leading to improved pregnancy outcomes. Murine embryos were exposed to 200 nmol/l IGF-I, similar to the concentrations that can occur during polycystic ovary syndrome (PCOS). Resulting blastocysts were compared with embryos cocultured with excess IGF-I plus metformin and embryos cultured in control medium for the following: AMPK phosphorylation, insulin-stimulated glucose uptake, and apoptosis. Study and control blastocysts were also transferred into control animals. On embryonic day (E) 14.5, resulting fetuses were examined for size and rates of fetal implantation and resorption. Compared with control blastocysts, blastocysts exposed to high concentrations of IGF-I showed a decrease in AMPK activation and insulin-stimulated glucose uptake and an increase in the number of apoptotic nuclei. Blastocysts cocultured in metformin and excess IGF-I performed as well as controls in all studies. 5-Aminoimidazole-4-carboxamide 1-beta-d-ribofuranoside, another AMPK activator, also prevented the effects of excess IGF-I on blastocysts. Implantation rates and fetal size at day 14.5 were significantly lower among IGF-I-exposed embryos transferred into control mothers compared with control embryos transferred into control mothers. Both of these parameters were reversed by co-incubation with metformin and IGF-I before transfer. Activation of embryonic AMPK may be the mechanism responsible for the improved pregnancy outcomes seen in PCOS patients taking metformin.