The proinsulin connecting peptide, C-peptide, is a cleavage product of insulin synthesis that is co-secreted with insulin by pancreatic β-cells following glucose stimulation. Recombinant insulin, used in the treatment of diabetes, lacks C-peptide and preclinical and clinical studies suggest that lack of C-peptide may exacerbate diabetes-associated complications. In accordance with this, several studies suggest that C-peptide has beneficial effects in a number of diabetes-associated complications. C-peptide has been shown to prevent diabetic neuropathy by improving endoneural blood flow, preventing neuronal apoptosis and by preventing axonal swelling. In the vascular system, C-peptide has been shown to prevent vascular dysfunction in diabetic rats, and to possess anti-proliferative effects on vascular smooth muscle cells, which may prevent atherosclerosis. However, C-peptide depositions have been found in arteriosclerotic lesions of patients with hyperinsulinemic diabetes and C-peptide has been shown to induce pro-inflammatory mediators, such as nuclear factor kappa B, inducible nitric oxide synthase, and cyclooxygenase-2, indicating that C-peptide treatment could be associated with side-effects that may accelerate the development of diabetes-associated complications. This review provides a brief summary of recent research in the field and discusses potential beneficial and detrimental effects of C-peptide supplementation.