Genetic disruption of protein-tyrosine phosphatase 1B (PTP1B) in mice leads to increased insulin sensitivity and resistance to weight gain. Although PTP1B has been implicated as a regulator of multiple signals, its function in other physiological responses in vivo is poorly understood. Here we demonstrate that PTP1B-null mice are resistant to Fas-induced liver damage and lethality, as evident by reduced hepatic apoptosis in PTP1B-null versus wild type mice and reduced levels of circulating liver enzymes. Activation of pro-apoptotic caspases-8, -9, -3, and -6 was attenuated in livers from PTP1B-null mice following Fas receptor stimulation, although components of the death-inducing signaling complex were intact. Activation of anti-apoptotic regulators, such as the hepatocyte growth factor/Met receptor tyrosine kinase, as well as Raf, ERK1/2, FLIP(L), and the NF-kappaB pathway, was elevated in response to Fas activation in livers from PTP1B-null mice. Using PTP1B-deficient primary hepatocytes, we show that resistance to Fas-mediated apoptosis is cell autonomous and that signals involving the Met, ERK1/2, and NF-kappaB pathways are required for cytoprotection. This study identifies a previously unknown physiological role for PTP1B in Fas-mediated liver damage and points to PTP1B as a potential therapeutic target against hepatotoxic agents.