Metformin is a drug to improve glycemic control by reducing insulin resistance and is currently considered to be one of the first-choice drugs for type 2 diabetes mellitus (T2DM). However, during metformin use, adverse drug reactions (ADRs) including gastrointestinal adverse events were frequently observed. Thus, in the present study, we investigated the incidence of ADRs induced by metformin and further analyzed risk factors for ADRs in Japanese patients with type 2 diabetes mellitus who initially administered metformin (500–750 mg). One hundred and one hospitalized patients receiving metformin during September 1, 2009 and August 31, 2010 were studied. The incidence of ADRs and changes in laboratory data including hemoglobin A1c (HbA1c) were monitored retrospectively. The anti-glycemic effect of metformin was successfully observed as indicated by decreased HbA1c. Among ADRs, diarrhea was most frequently occurred during metformin use (26.7% of patients) although the symptom of diarrhea was mild in most cases and disappeared within 3 d after the initial use. A logistic regression analysis showed the existence of six risk factors, including initial dose (750 mg), female, age (≦65), body mass index (≧25), aspartate aminotransferase (≧30 IU/L) and alkaline phosphatase (≧270 IU/L). The incidence of diarrhea increased linearly as the number of risk factors increased. In conclusion, in order to avoid ADRs, especially diarrhea, subsequently improving the quality of life during metformin use, the optimization of the dose of metformin by considering risk factors would be beneficial for patients with T2DM.