Metformin is a widely prescribed anti-diabetic medicine that also reduces body weight. There is ongoing debate about the mechanisms that mediate metformin's effects on energy balance. Here, we show that metformin is a powerful pharmacological inducer of the anorexigenic metabolite N-lactoyl-phenylalanine (Lac-Phe) in cells, in mice and two independent human cohorts. Metformin drives Lac-Phe biosynthesis through the inhibition of complex I, increased glycolytic flux and intracellular lactate mass action. Intestinal epithelial CNDP2+ cells, not macrophages, are the principal in vivo source of basal and metformin-inducible Lac-Phe. Genetic ablation of Lac-Phe biosynthesis in male mice renders animals resistant to the effects of metformin on food intake and body weight. Lastly, mediation analyses support a role for Lac-Phe as a downstream effector of metformin's effects on body mass index in participants of a large population-based observational cohort, the Multi-Ethnic Study of Atherosclerosis. Together, these data establish Lac-Phe as a critical mediator of the body weight-lowering effects of metformin.