PTP1B is a master regulator in the insulin and leptin metabolic pathways. Hyper-activated PTP1B results in insulin resistance and is viewed as a key factor in the onset of type II diabetes and obesity. Moreover, inhibition of PTP1B expression in cancer cells dramatically inhibits cell growth in vitro and in vivo. Herein, we report the computationally guided optimization of a salicylic acid-based PTP1B inhibitor 6, identifying new and more potent bidentate PTP1B inhibitors, such as 20h, which exhibited a > 4-fold improvement in activity. In CHO-IR cells, 20f, 20h, and 20j suppressed PTP1B activity and restored insulin receptor phosphorylation levels. Notably, 20f, which displayed a 5-fold selectivity for PTP1B over the closely related PTPσ protein, showed no inhibition of PTP-LAR, PRL2 A/S, MKPX, or papain. Finally, 20i and 20j displayed nanomolar inhibition of PTPσ, representing interesting lead compounds for further investigation.