Protein tyrosine phosphatase 1B (PTP1B) is a negative regulator of insulin receptor (IR) signal transduction and a drug target for treatment of type 2 diabetes. Using PTP1B antisense oligonucleotides (ASOs), effects of decreased PTP1B levels on insulin signaling in diabetic ob/ob mice were examined. Insulin stimulation, prior to sacrifice, resulted in no significant activation of insulin signaling pathways in livers from ob/ob mice. However, in PTP1B ASO-treated mice, in which PTP1B protein was decreased by 60% in liver, similar stimulation with insulin resulted in increased tyrosine phosphorylation of the IR and IR substrate (IRS)-1 and -2 by threefold, fourfold, and threefold, respectively. IRS-2-associated phosphatidylinositol 3-kinase activity was also increased threefold. Protein kinase B (PKB) serine phosphorylation was increased sevenfold in liver of PTP1B ASO-treated mice upon insulin stimulation, while phosphorylation of PKB substrates, glycogen synthase kinase (GSK)-3alpha and -3beta, was increased more than twofold. Peripheral insulin signaling was increased by PTP1B ASO, as evidenced by increased phosphorylation of PKB in muscle of insulin-stimulated PTP1B ASO-treated animals despite the lack of measurable effects on muscle PTP1B protein. These results indicate that reduction of PTP1B is sufficient to increase insulin-dependent metabolic signaling and improve insulin sensitivity in a diabetic animal model.