To investigate the role of low molecular weight proteintyrosine phosphatase (LMW-PTP) in glucose metabolism and insulin action, a specific antisense oligonucleotide (ASO) was used to reduce its expression both in vitro and in vivo. Reduction of LMW-PTP expression with the ASO in cultured mouse hepatocytes and in liver and fat tissues of diet-induced obese (DIO) mice and ob/ob mice led to increased phosphorylation and activity of key insulin signaling intermediates, including insulin receptor- subunit, phosphatidylinositol 3-kinase, and Akt in response to insulin stimulation. The ASO-treated DIO and ob/ob animals showed improved insulin sensitivity, which was reflected by a lowering of both plasma insulin and glucose levels and improved glucose and insulin tolerance in DIO mice. The treatment did not decrease body weight or increase metabolic rate. These data demonstrate that LMW-PTP is a key negative regulator of insulin action and a potential novel target for the treatment of insulin resistance and type 2 diabetes.The incidence of diabetes has been steadily increasing and has become a major public health concern. Over 85% of diabetic patients have type 2 diabetes. Obesity, which can result from a sedentary life style and high calorie diet, is a major risk factor for the development of this disorder (1). A hallmark of type 2 diabetes is insulin resistance, characterized by a decreased insulin response in a variety of tissues (2), including liver, fat, and muscle. Therefore, increasing insulin sensitivity is a practical strategy for the treatment of type 2 diabetes.Insulin initiates its physiological response by binding to its membrane-bound receptor (IR, a ␣ 2  2 -heterotetramer protein), 2 which causes autophosphorylation of the -subunit and receptor activation, resulting in subsequent phosphorylation of its two major downstream substrates, IRS-1 and IRS-2 (3-5). Phosphorylated IRS-1 and -2 interact with and activate other SH2 domain-containing adapter molecules such as NCK2, Grb2, Shc, Syp (4 -8), and the regulatory subunit (p85) of phosphatidylinositol 3-kinase (PI3-K) (9, 10). Activated PI3-K stimulates Akt (or protein kinase B) that in turn phosphorylates and inactivates glycogen synthase kinase-3 (11), resulting in activation of glycogen synthase (12), thereby increasing the utilization of glucose for glycogen synthesis. In fat and muscle, activation of this pathway also causes transfer of GLUT4 from the cytoplasm to the cell membrane, resulting in increased glucose uptake (13). Therefore, IR-IRS-1/2-PI3-K-Akt signaling cascade is a key pathway in mediating the effects of insulin action on blood glucose levels. A number of studies have established a role for intracellular phosphatases in the negative regulation of insulin signaling (14 -16) such as protein-tyrosine phosphatase (PTP) 1B that negatively regulates insulin action through dephosphorylating tyrosine-phosphorylated IR (15, 16). Insulin sensitivity was enhanced in PTP1B knock-out mice, in which increased tyrosine phosphorylation of IR was found...