We do know that melatonin lowers your body temperature, and so makes you a little sleepy. However, according to Professor Drew Dawson at the Centre for Sleep Research at Adelaide University, melatonin ironically has its strongest effect on those people who don't need it - young adults who have no sleeping problems. Melatonin is also somehow involved in your regular daily rhythms. The cancer results are still very early and not proven yet, but it seems that melatonin can help in the treatment of breast cancer, when it's given with the standard anti-cancer drugs. Melatonin also acts as an anti-oxidant and a scavenger of free radicals, but only at very high blood concentrations.
Some studies show that melatonin can stimulate parts of the immune system - in animals.
But there have never been any controlled studies on humans. And one real worry is that melatonin could trigger an underlying auto-immune disease that you didn't know you were likely to get, such as rheumatoid arthritis. The books that hype melatonin use three main tactics, to give the general public an unbalanced and non-scientific understanding of melatonin. First, they exaggerate the importance of a few minor studies, that are usually done with animals, not humans . Second, they claim that certain theories are facts, when they are really just theories, with little or no supporting data.