Insulin signaling involves a dynamic cascade of protein tyrosine phosphorylation and dephosphorylation. Most of our understanding of this process comes from studies focusing on tyrosine kinases, which are signal activators. Our knowledge of the role of protein-tyrosine phosphatases (PTPases), signal attenuators, in regulating insulin signal transduction remains rather limited. Protein-tyrosine phosphatase 1B (PTP-1B), the prototypical PTPase, is ubiquitously and abundantly expressed. Work from several laboratories, including our own, has implicated PTP-1B as a negative regulator of insulin action and as a potentially important mediator in the pathogenesis of insulin-resistance and non-insulin dependent diabetes mellitus (NIDDM).