A series of substituted phenoxy-3-piperazin-1-yl-propan-2-ols has been synthesized and evaluated for PTP1B inhibitory activity in vitro and for antidiabetic activity in vivo. Two molecules viz. 4a and 5b showed PTP1B inhibition of 31.58% and 35.90% at 100 μM concentration. The compound 4a also showed 40.3% normalization of plasma glucose levels at 100mg/kg in Sugar-loaded model (SLM) and 32% activity in Streptozodocin model (STZ). The docking studies of these molecules revealed that hydrogen bond formation with Arg221 is important for activity.