Trodusquemine (MSI‐1436) causes rapid and reversible weight loss in genetic models of obesity. To better predict the potential effects of trodusquemine in the clinic, we investigated the effects of trodusquemine treatment in a murine model of diet‐induced obesity (DIO). Trodusquemine suppressed appetite, reduced body weight (BW) in a fat‐specific manner, and improved plasma insulin and leptin levels in mice. Screening assays revealed that trodusquemine selectively inhibited protein‐tyrosine phosphatase 1B (PTP1B), a key enzyme regulating insulin and leptin signaling. Trodusquemine significantly enhanced insulin‐stimulated tyrosine phosphorylation of insulin receptor (IR) β and STAT3, direct targets of PTP1B, in HepG2 cells in vitro and/or hypothalamic tissue in vivo. These data establish trodusquemine as an effective central and peripheral PTP1B inhibitor with the potential to elicit noncachectic fat‐specific weight loss and improve insulin and leptin levels.