The designed and synthesized 2-(4-methoxyphenyl) ethyl] acetamide derivatives (3a, 3b and 3c) were evaluated for their PTP1B inhibitory activity where they showed IC(50) values 69 microM, 87 microM and 71 microM, respectively. These results correlated well with the docking studies and in vivo screening of the compounds for their antidiabetic activity in SLM and STZ models.