Protein tyrosine phosphatases (PTPases) are involved in the control of tyrosine phosphorylation levels in the cell and are believed to be crucial for the regulation of a multitude of cellular functions. A detailed understanding of the role played by PTPases in various signaling pathways has not yet been achieved, and potent and selective PTPase inhibitors are essential in the quest to determine the functionality of individual PTPases. Using the DOCK methodology, we have carried out a structure-based, computer-assisted search of an available chemical database in order to identify low molecular weight, nonpeptidic PTP1B inhibitors. We have identified several organic molecules that not only possess inhibitory activity against PTP1B but which also display significant selectivity for PTP1B. This indicates that although structural features important for pTyr recognition are conserved among different PTPases, it is possible to generate selective inhibitors targeted primarily to the catalytic site. Kinetic analysis and molecular modeling experiments suggest that the PTP1B active site possesses significant plasticity such that substituted and extended aromatic systems can be accommodated. The newly identified molecules provide a molecular framework upon which therapeutically useful compounds can ultimately be based, and systematic optimization of these lead compounds is likely to further enhance their potency and selectivity.