Our understanding of the fundamental regulatory roles that tyrosine phosphatases play within cells has advanced significantly in the last two decades. Out-dated ideas that tyrosine phosphatases acts solely as the "off" switch counterbalancing the action of tyrosine kinases has proved to be flawed. PTP1B is the most characterized of all the tyrosine phosphatases and it acts as a critical negative and positive regulator of numerous signaling cascades. PTP1B's direct regulation of the insulin and the leptin receptors makes it an ideal therapeutic target for type II diabetes and obesity. Moreover, the last decade has also seen several reports establishing PTP1B as key player in cancer serving as both tumor suppressor and tumor promoter depending on the cellular context. Despite many key advances in these fields one largely ignored area is what role PTP1B may play in the modulation of immune signaling. The important recognition that PTP1B is a major negative regulator of Janus kinase - signal transducer and activator of transcription (JAK-STAT) signaling throughout evolution places it as a key link between metabolic diseases and inflammation, as well as a unique regulator between immune response and cancer. This review looks at the emergence of PTP1B through evolution, and then explore at the cell and systemic levels how it is controlled physiologically. The second half of the review will focus on the role(s) PTP1B can play in disease and in particular its involvement in metabolic syndromes and cancer. Finally we will briefly examine several novel directions in the development of PTP1B pharmacological inhibitors.