Protein tyrosine phosphatase 1B (PTP1B), a negative regulator of insulin signalling, is a novel therapeutic target for type 2 diabetes mellitus. We evaluated in vitro and in vivo the pharmacological profiles of a new PTP1B inhibitor, JTT-551: monosodium ({[5-(1,1-dimethylethyl)thiazol-2-yl]methyl} {[(4-{4-[4-(1-propylbutyl)phenoxy]methyl}phenyl)thiazol-2-yl]methyl}amino)acetate. PTP1B inhibitory activity and the inhibition mode were assayed with p-nitrophenyl phosphate as a substrate, and the selectivity of JTT-551 against other PTPs, including T-cell protein tyrosine phosphatase (TCPTP), CD45 protein tyrosine phosphatase (CD45) and leucocyte common antigen-related protein tyrosine phosphatase (LAR), was evaluated. Glucose uptake with JTT-551 treatment was evaluated in L6 rat skeletal myoblasts (L6 cells). In the in vivo study, we investigated the effects on insulin receptor (IR) phosphorylation and blood chemical parameters with JTT-551 administration in ob/ob mice and db/db mice. JTT-551 showed an inhibitory effect on PTP1B with a Ki value of 0.22 microM, and a mixed-type inhibition mode. Ki values of TCPTP, CD45 and LAR were 9.3, 30 or higher and 30 or higher microM, respectively, and JTT-551 exhibited clear selectivity against the other PTPs. Moreover, JTT-551 increased the insulin-stimulated glucose uptake in L6 cells. A single administration of JTT-551 in ob/ob mice enhanced the IR phosphorylation of liver and reduced the glucose level. In db/db mice, chronic administration showed a hypoglycaemic effect without an acceleration of body weight gain. JTT-551, a newly developed PTP1B inhibitor, improves glucose metabolism by enhancement of insulin signalling and could be useful in the treatment of type 2 diabetes mellitus.