Insulin is the principal regulatory hormone involved in the tight regulation of fuel metabolism. In response to blood glucose levels, it is secreted by the β cells of the pancreas and exerts its effects by binding to cell surface receptors that are present on virtually all cell types and tissues. In humans, perturbations in insulin function and/or secretion lead to diabetes mellitus, a severe disorder primarily characterized by an inability to maintain blood glucose homeostasis. Furthermore, it is estimated that 90–95% of diabetic patients exhibit resistance to insulin action. Thus an understanding of insulin signal transduction and insulin resistance at the molecular level is crucial to the understanding of the␣pathogenesis of this disease. The insulin receptor (IR) is a transmembrane tyrosine kinase that becomes activated upon ligand binding. Consequently, the receptor and its downstream substrates become tyrosine phosphorylated. This activates a series of intracellular signaling cascades which coordinately initiate the appropriate biological response. One important mechanism by which insulin signaling is regulated involves the protein tyrosine phosphatases (PTPs), which may either act on the IR itself and/or its substrates. Two well characterized examples include leuckocyte antigen related (LAR) and protein tyrosine phosphatase‐1B (PTP‐1B). The present review will discuss the current knowledge of these two and other potential PTPs involved in the insulin signaling pathway.