PTPσ is a dual-domain receptor type protein tyrosine phosphatase (PTP) with physiologically important functions which render this enzyme an attractive biological target. Specifically, loss of PTPσ has been shown to elicit a number of cellular phenotypes including enhanced nerve regeneration following spinal cord injury (SCI), chemoresistance in cultured cancer cells, and hyperactive autophagy, a process critical to cell survival and the clearance of pathological aggregates in neurodegenerative diseases. Owing to these functions, modulation of PTPσ may provide therapeutic value in a variety of contexts. Furthermore, a small molecule inhibitor would provide utility in discerning the cellular functions and substrates of PTPσ. To develop such molecules, we combined in silico modeling with in vitro phosphatase assays to identify compounds which effectively inhibit the enzymatic activity of PTPσ. Importantly, we observed that PTPσ inhibition was frequently mediated by oxidative species generated by compounds in solution, and we further optimized screening conditions to eliminate this effect. We identified a compound that inhibits PTPσ with an IC(50) of 10 µM in a manner that is primarily oxidation-independent. This compound favorably binds the D1 active site of PTPσ in silico, suggesting it functions as a competitive inhibitor. This compound will serve as a scaffold structure for future studies designed to build selectivity for PTPσ over related PTPs.