Protein tyrosine phosphatase 1B (PTP1B), a member of the superfamily of protein tyrosine phosphatases, has been implicated in cancer pathogenesis. However, the role of PTP1B in the development of gastric cancer is unclear. The purpose of this study was to clarify the expression pattern and role of PTP1B in the gastric cancer. The expression of PTP1B in gastric cancer tissues was determined by immunohistochemical staining. Cell growth assay, soft agar colony formation assay, and tumorigenicity assay were used for examining proliferation, colony formation, and in vivo tumorigenesis of gastric cancer cells. The total levels and phosphorylated levels of Akt, extracellular signal-regulated kinase (Erk1/2), focal adhesion kinase (FAK), and Src were examined by western blotting, respectively. PTP1B was overexpressed in gastric cancer tissues (65/80) and correlated with tumor metastasis and tumor-node-metastasis stage. Overexpression of PTP1B promoted the proliferation and in vivo tumorigenesis of MKN45 cells and also increased the phosphorylation levels of Akt, Erk1/2, and FAK and the activity of Src. These results were conformed by knockdown of PTP1B in MKN28 cells. Therefore, our study suggested that PTP1B expression might play an important role in the development of gastric cancer.