Protein-tyrosine phosphatase 1B (PTP1B) is a major negative regulator of insulin and leptin sensitivity. PTP1B overexpression in adipose tissue and skeletal muscle of humans and rodents may contribute to insulin resistance and obesity. The mechanisms mediating PTP1B overexpression in obese and diabetic states have been unclear. We find that adipose tissue inflammation and the pro-inflammatory cytokine tumor necrosis factor ␣ (TNF␣) regulate PTP1B expression in vivo. High fat feeding of mice increased PTP1B expression 1.5-to 7-fold in adipose tissue, liver, skeletal muscle, and arcuate nucleus of hypothalamus. PTP1B overexpression in high fat-fed mice coincided with increased adipose tissue expression of the macrophage marker CD68 and TNF␣, which is implicated in causing obesity-induced insulin resistance. TNF␣ increased PTP1B mRNA and protein levels by 2-to 5-fold in a dose-and time-dependent manner in adipocyte and hepatocyte cell lines. TNF␣ administration in mice increased PTP1B mRNA 1.4-to 4-fold in adipose tissue, liver, skeletal muscle, and hypothalamic arcuate nucleus and PTP1B protein 2-fold in liver. Actinomycin D treatment blocked, and high dose salicylate treatment inhibited by 80%, TNF␣-induced PTP1B expression in adipocyte cell lines, suggesting TNF␣ may induce PTP1B transcription via nuclear factor B (NFB) activation. Chromatin immunoprecipitation from adipocyte cell lines and liver of mice demonstrated TNF␣-induced recruitment of NFB subunit p65 to the PTP1B promoter in vitro and in vivo. In mice with diet-induced obesity, TNF␣ deficiency also partly blocked PTP1B overexpression in adipose tissue. Our data suggest that PTP1B overexpression in multiple tissues in obesity is regulated by inflammation and that PTP1B may be a target of anti-inflammatory therapies.According to current World Health Organization estimates, twice as many people worldwide suffer ill health effects from the accumulation of excess adipose mass (1.6 billion) than from malnutrition (800 million). Obesity contributes to the pathogenesis of many important human diseases, including type 2 diabetes and cancer (1). Obesity is accompanied by resistance to insulin and leptin, key hormones regulating glucose homeostasis and body weight (2). The molecular mechanisms underlying leptin and insulin resistance in obesity are not completely understood. PTP1B 2 is a major negative regulator of insulin and leptin sensitivity, acting to dephosphorylate the insulin receptor and the leptin receptor-associated Janus kinase 2 (3, 4). PTP1B may also dephosphorylate more distal components of these signaling pathways, such as insulin receptor substrate 1 (5, 6). In vivo, PTP1B is widely expressed in multiple cell types and tissues, including skeletal muscle, liver, adipose tissue, and brain (3, 4). PTP1B deficiency enhances insulin signaling and sensitivity in skeletal muscle and liver (7-10). PTP1B Ϫ/Ϫ mice also have reduced adiposity and are protected from diet-induced obesity (7, 8) due to enhanced leptin action (11, 12) in neurons (9). Conversely...