Protein tyrosine phosphatase 1B (PTP1B) is known to promote the pathogenesis of diabetes and obesity by negatively regulating insulin and leptin pathways, but its role associated with colon carcinogenesis is still under debate. In this study, we demonstrated the oncogenic role of PTP1B in promoting colon carcinogenesis and predicting worse clinical outcomes in CRC patients. By co-immunoprecipitation, we showed that PITX1 was a novel substrate of PTP1B. Through direct dephosphorylation at Y160, Y175 and Y179, PTP1B destabilized PITX1, which resulted in downregulation of the PITX1/p120RasGAP axis. Interestingly, we found that regorafenib, the approved target agent for advanced CRC patients, exerted a novel property against PTP1B. By inhibiting PTP1B activity, regorafenib treatment augmented the stability of PITX1 protein and upregulated the expression of p120RasGAP in CRC. Importantly, we found that this PTP1B-dependant PITX1/p120RasGAP axis determines the in vitro anti-CRC effects of regorafenib. The above-mentioned effects of regorafenib were confirmed by the HT-29 xenograft tumor model. In conclusion, we demonstrated a novel oncogenic mechanism of PTP1B on affecting PITX1/p120RasGAP in CRC. Regorafenib inhibited CRC survival through reserving PTP1B-dependant PITX1/p120RasGAP downregulation. PTP1B may be a potential biomarker predicting regorafenib effectiveness, and a potential solution for CRC.