Insulin is known to modulate transforming growth factor-beta (TGFbeta) signaling. In this report, by using the IN Cell Analyzer 1000, the fluorescence cell imaging instrument, we demonstrated that protein tyrosine phosphatase 1B (PTP1B) could regulate TGFbeta1-induced Smad2 activation in a PI3 kinase-dependent manner. By using the CHO cells stably expressing EGFP-Smad2, we showed that TGFbeta1 effectively stimulated Smad2 nuclear translocation in CHO cells. When pretreated with insulin, TGFbeta1-induced Smad2 nuclear entry was dramatically decreased. Furthermore, both the PI3K inhibitor LY294002 and the dominant negative AKT (DN-AKT) abolished the inhibitory effects of insulin, demonstrating that the inhibition of Smad2 activation by insulin was PI3K/AKT dependent. Since PTP1B negatively modulates insulin signaling, we further addressed the effects of PTP1B on insulin-mediated inhibition of Smad2 activation. Our data showed that overexpression of PTP1B effectively attenuated insulin-induced inhibition of Smad2 stimulation. Moreover, the PTP1B inhibitor, 3-(3,5-dibromo-4-hydroxy-benzoyl)-2-ethyl-benzofuran-6-sulfonicacid-(4-(thiazol-2-ylsulfamyl)-phenyl)-amide (Compound-2), recovered insulin inhibition of Smad2 activation. In conclusion, our data revealed the insulin inhibitory effects on TGFbeta1-induced Smad2 activation and the regulation role of PTP1B in the inhibition events.