We investigated the effect of overexpression of protein-tyrosine phosphatase 1B (PTP1B) on insulin signaling in 3T3-L1 adipocytes. Overexpression of a wild-type PTP1B in L1 adipocytes as well as in L6 myocytes, led to a profound decrease in insulin-stimulated phosphorylation of MAPK. Even though the decrease in insulin receptor substrate protein-1 (IRS-1) phosphorylation was identical with that seen in L6 myocytes, overexpression of wild-type PTP1B in L1 adipocytes was associated with modest impairment of insulin-stimulated Akt phosphorylation in addition to a small, but significant, attenuation in insulin-stimulated glucose uptake, when compared with a phosphatase-negative mutant. Regarding the relatively small effect on Akt phosphorylation, we obtained identical results in rat 1 fibroblasts overexpressing human insulin receptor, suggesting that the higher expression levels of insulin receptor and IRS-1 might be responsible. With regard to the large effect on MAPK phosphorylation, we found that PTP1B overexpression led to the impaired phosphorylation of both IRS-1 and Shc, resulting in a decrease in their association with Grb2. Furthermore, phosphorylation of Shc stimulated by platelet-derived growth factor was also attenuated, without any change in its receptors, suggesting that PTP1B directly regulates Shc phosphorylation. These data demonstrate that PTP1B negatively regulates insulin signaling in the MAPK cascade to a much greater extent than the Akt pathway in some cell lines, especially in L1 adipocytes.