Down-regulation of insulin signaling by protein-tyrosine phosphatase 1B is mediated by an N-terminal binding region

Protein-tyrosine phosphatases (PTPs) play a major role in regulating insulin signaling. Among the PTPs that regulate this signaling pathway, PTP1B plays an especially prominent role. PTP1B inhibits insulin signaling and has previously been shown to bind to the activated insulin receptor (IR), but neither the mechanism nor the physiological importance of such binding have been established. Here, we show that a previously undefined region in the N-terminal, catalytic half of PTP1B contributes to IR binding. Point mutations within this region of PTP1B disrupt IR binding but do not affect the catalytic activity of this phosphatase. This binding-defective mutant of PTP1B does not efficiently dephosphorylate the IR in cells, nor does it effectively inhibit IR signaling. These results suggest that PTP1B targets the IR through a novel binding element and that binding is required for the physiological effects of PTP1B on IR signal transduction.