Proinsulin connecting peptide (C-peptide) has been initially regarded as deprived of biological functions other than correct scaffolding of insulin. This was caused by the lack of evident effect of C-peptide administration to healthy subjects or animals. At present, in view of numerous studies concerning its structure, membrane binding and biological functions, C-peptide seems to constitute a crucial role in the pathogenesis of complications in diabetes mellitus type 1 (DM1). Patients who maintain high remnant insulin secretion (and therefore also of C-peptide) develop complications such as nephropathy, neuropathy and later microangiopathy with a milder clinical course. In this article we have covered molecular and cellular aspects of C-peptide functioning, such as: activation of protein kinase C, Na+,K+- ATP-ase, nitric oxide synthase, MAP and ERK 1/2 kinases, improvement of nerve conduction velocity and interactions with exogenous and endogenous insulin. We also outline the clinical consequences of deficiency of this underestimated peptide along with its potential therapeutical possibilities in the primary and secondary prevention of DM1 complications.