Protein-tyrosine phosphatases (PTPases) play an important role in the regulation of insulin action by dephosphorylating the active (autophosphorylated) form of the insulin receptor and attenuating its tyrosine kinase activity. PTPases can also modulate post-receptor signalling by catalyzing the dephosphorylation of cellular substrates of the insulin receptor kinase. Dramatic advances have recently been made in our understanding of PTPases as an extensive family of transmembrane and intracellular proteins that are involved in a number of pathways of cellular signal transduction. Identification of the PTPase(s) which act on various components of the insulin action cascade will not only enhance our understanding of insulin signalling but will also clarify the potential involvement of PTPases in the pathophysiology of insulin-resistant disease states. This brief review provides a summary of reversible tyrosine phosphorylation events in insulin action and available data on candidate PTPases in liver and skeletal muscle that may be involved in the regulation of insulin action.