Protein tyrosine phosphatase 1B (PTP1B) is an established target for diabetes and obesity but identifying drug-like PTP1B inhibitors has proved challenging. Haque et al. generated single-chain variable fragments of antibodies that stabilized the oxidized form of PTP1B and so inhibited its phosphatase function. Intracellular expression of the antibodies enhanced insulin-induced tyrosyl phosphorylation of the β-subunit of the insulin receptor and its substrate, and increased insulin-induced phosphorylation of AKT, suggesting that stabilization of the oxidized form of PTP1B could be a useful approach to design PTP inhibitors.