Insulin signaling is regulated by tyrosine phosphorylation of the signaling molecules, such as the insulin receptor and insulin receptor substrates (IRSs). Therefore, the balance between protein-tyrosine kinases and protein-tyrosine phosphatase activities is thought to be important in the modulation of insulin signaling in insulin-resistant states. We thus employed the adenovirus-mediated gene transfer technique, and we analyzed the effect of overexpression of a wild-type protein-tyrosine phosphatase-1B (PTP1B) on insulin signaling in both L6 myocytes and Fao cells. In both cells, PTP1B overexpression blocked insulin-stimulated tyrosine phosphorylation of the insulin receptor and IRS-1 by more than 70% and resulted in a significant inhibition of the association between IRS-1 and the p85 subunit of phosphatidylinositol 3-kinase and Akt phosphorylation as well as mitogen-activated protein kinase phosphorylation. Moreover, insulin-stimulated glycogen synthesis was also inhibited by PTP1B overexpression in both cells. These effects were specific for insulin signaling, because platelet-derived growth factor (PDGF)-stimulated PDGF receptor tyrosine phosphorylation and Akt phosphorylation were not inhibited by PTP1B overexpression. The present findings demonstrate that PTP1B negatively regulates insulin signaling in L6 and Fao cells, suggesting that PTP1B plays an important role in insulin resistance in muscle and liver.