Somatostatin is found in the pancreas and gastrointestinal tract, including the visceral autonomic nervous system, the endocrine D cells and the gut lumen. Somatostatin peptides may act differently at different sites as hormones, as paracrine substrances or neurotransmitters. So far not much is known on the physiological effects of somatostatin in the gastrointestinal tract. Somatostatin and octreotide, a synthetic analogue with a longer half-life and higher potency, inhibit the neuroendocrine and exocrine gastrointestinal secretion, intestinal glucose, fat and amino acid transport, intestinal propulsive and gallbladder motility, splanchnic blood flow in volunteers and hepatic venous pressure in cirrhotic patients. The inhibition occurs to various extents depending on the target organ. This review deals with the pharmacological effects of octreotide on different gastrointestinal functions and describes its possible therapeutic role in different gastrointestinal disorders.