Insulin resistance is a characteristic feature of type 2 diabetes mellitus (T2DM) and is characterized by defects in insulin signaling. Protein tyrosine phosphatase 1B (PTP1B) is a key negative regulator of the insulin signaling pathways, and its increased activity and expression are implicated in the pathogenesis of insulin resistance. Therefore, the inhibition of PTP1B is anticipated to become a potential therapeutic strategy to treat T2DM. Fumosorinone (FU), a new natural product isolated from insect fungi Isaria fumosorosea, was found to inhibit PTP1B activity in our previous study. Herein, the effects of FU on insulin resistance and mechanism in vitro and in vivo were investigated. FU increased the insulin-provoked glucose uptake in insulin-resistant HepG2 cells, and also reduced blood glucose and lipid levels of type 2 diabetic KKAy mice. FU decreased the expression of PTP1B both in insulin-resistant HepG2 cells and in liver tissues of diabetic KKAy mice. Furthermore, FU increased the phosphorylation of IRβ, IRS-2, Akt, GSK3β and Erk1/2 in insulin-resistant HepG2 cells, as well as the phosphorylation of IRβ, IRS-2, Akt in liver tissues of diabetic KKAy mice. These results showed that FU increased glucose uptake and improved insulin resistance by down-regulating the expression of PTP1B and activating the insulin signaling pathway, suggesting that it may possess antidiabetic properties.