Inhibition of protein tyrosine phosphatase 1B (PTP1B) has been proposed as a strategy for the treatment of type 2 diabetes and obesity. Bioassay-guided fractionation of MeOH extract of Selaginella tamariscina (Selaginellaceae) afforded a PTP1B inhibitory compound, amentoflavone. The compound inhibited PTP1B with an IC50 value of 7.3+/-0.5 microM. Kinetic study suggested that amentoflavone is a non-competitive inhibitor of PTP1B, with a Ki value of 5.2 microM. Treatment of 32D cells overexpressing the insulin receptor (IR) with amentoflavone resulted in a dose-dependent increase in tyrosine phosphorylation of IR. These results indicate that amentoflavone may enhance insulin-induced intracellular signaling possibly through inhibition of PTP1B activity.