Upon leptin binding, the leptin receptor is activated, leading to stimulation of the JAK/STAT signal transduction cascade. The transient character of the tyrosine phosphorylation of JAK2 and STAT3 suggests the involvement of protein tyrosine phosphatases (PTPs) as negative regulators of this signalling pathway. Specifically, recent evidence has suggested that PTP1B might be a key regulator of leptin signalling, based on the resistance to diet-induced obesity and increased leptin signalling observed in PTP1B-deficient mice. The present study was undertaken to investigate the mechanism by which PTP1B mediates the cessation of the leptin signal transduction. Leptin-induced activation of a STAT3 responsive reporter was dose-dependently inhibited by co-transfection with PTP1B. No inhibition was observed when a catalytically inactive mutant of PTP1B was used or when other PTPs were co-transfected. PTP1B was able to dephosphorylate activated JAK2 and STAT3 in vitro, whereas either no or a minimal effect was observed with cluster of differentiation 45 (CD45), PTPalpha and leukocyte antigen-related (LAR). By utilisation of a selective PTP1B inhibitor, the leptin-induced STAT3 activation was enhanced in cells. In conclusion, these results suggested that the negative regulatory role of PTP1B on leptin signalling is mediated through a direct and selective dephosphorylation of the two signalling molecules, JAK2 and STAT3.