Fifteen novel sulfathiazole-related compounds were designed as PTP1B inhibitors based on a previously reported allosteric inhibitor (1) of PTP1B. These compounds were synthesized and evaluated against human recombinant PTP1B. Six compounds (3, 4, 8 and 14-16) exhibited significant inhibitory activity against PTP1B. The most active compound (16) showed IC50 value of 3.2 μM and kinetic analysis indicated that it is a non-competitive inhibitor of PTP1B. Furthermore, compound 16 demonstrated excellent selectivity to PTP1B over other PTPs. It also displayed in vivo insulin sensitizing effect in the insulin resistant mice.