PTP1B؊/؊ mice are resistant to diet-induced obesity due to leptin hypersensitivity and consequent increased energy expenditure. We aimed to determine the cellular mechanisms underlying this metabolic state. AMPK is an important mediator of leptin's metabolic effects. We find that ␣1 and ␣2 AMPK activity are elevated and acetylcoenzyme A carboxylase activity is decreased in the muscle and brown adipose tissue (BAT) of PTP1B ؊/؊ mice. The effects of PTP1B deficiency on ␣2, but not ␣1, AMPK activity in BAT and muscle are neuronally mediated, as they are present in neuron-but not muscle-specific PTP1B ؊/؊ mice. In addition, AMPK activity is decreased in the hypothalamic nuclei of neuronal and whole-body PTP1B ؊/؊ mice, accompanied by alterations in neuropeptide expression that are indicative of enhanced leptin sensitivity. Furthermore, AMPK target genes regulating mitochondrial biogenesis, fatty acid oxidation, and energy expenditure are induced with PTP1B inhibition, resulting in increased mitochondrial content in BAT and conversion to a more oxidative muscle fiber type. Thus, neuronal PTP1B inhibition results in decreased hypothalamic AMPK activity, isoform-specific AMPK activation in peripheral tissues, and downstream gene expression changes that promote leanness and increased energy expenditure. Therefore, the mechanism by which PTP1B regulates adiposity and leptin sensitivity likely involves the coordinated regulation of AMPK in hypothalamus and peripheral tissues.Protein tyrosine phosphatase 1B (PTP1B) belongs to a family of tyrosine phosphatases with diverse roles in eukaryotes (2, 4). PTP1B attenuates insulin signaling by dephosphorylating the insulin receptor (19,22,61) and possibly IRS-1 (9, 23) and leptin signaling by dephosphorylating JAK2, which phosphorylates the leptin receptor and associated substrates (10, 45, 67). PTP1B-deficient mice are insulin hypersensitive, lean, and resistant to diet-induced obesity (20, 36) due, at least in part, to increased energy expenditure (36). The leanness can be explained by the absence of PTP1B in neurons, because neuronspecific PTP1B Ϫ/Ϫ mice also have reduced body weight and adiposity and increased energy expenditure (6). In contrast, muscle-and liver-specific PTP1B-deficient mice have normal body weight with improved insulin sensitivity, whereas adipose-PTP1B-deficient mice have increased body weight (6,15,16). These data suggest that PTP1B in peripheral tissues such as muscle and liver is an important mediator of peripheral insulin sensitivity, whereas PTP1B in the nervous system plays a critical role in regulating energy expenditure and adiposity (6).The adipocyte-derived hormone leptin plays an essential