Protein tyrosine phosphatase-1B (PTP1B) negatively regulates insulin and leptin signaling, rendering it an attractive drug target for treatment of obesity-induced insulin resistance. However, some studies suggest caution when targeting macrophage PTP1B, due to its potential anti-inflammatory role. We assessed the role of macrophage PTP1B in inflammation and whole-body metabolism using myeloid-cell (LysM) PTP1B knockout mice (LysM PTP1B). LysM PTP1B mice were protected against lipopolysaccharide (LPS)-induced endotoxemia and hepatic damage associated with decreased proinflammatory cytokine secretion in vivo. In vitro, LPS-treated LysM PTP1B bone marrow-derived macrophages (BMDMs) displayed increased interleukin (IL)-10 mRNA expression, with a concomitant decrease in TNF-α mRNA levels. These anti-inflammatory effects were associated with increased LPS- and IL-10-induced STAT3 phosphorylation in LysM PTP1B BMDMs. Chronic inflammation induced by high-fat (HF) feeding led to equally beneficial effects of macrophage PTP1B deficiency; LysM PTP1B mice exhibited improved glucose and insulin tolerance, protection against LPS-induced hyperinsulinemia, decreased macrophage infiltration into adipose tissue, and decreased liver damage. HF-fed LysM PTP1B mice had increased basal and LPS-induced IL-10 levels, associated with elevated STAT3 phosphorylation in splenic cells, IL-10 mRNA expression, and expansion of cells expressing myeloid markers. These increased IL-10 levels negatively correlated with circulating insulin and alanine transferase levels. Our studies implicate myeloid PTP1B in negative regulation of STAT3/IL-10-mediated signaling, highlighting its inhibition as a potential anti-inflammatory and antidiabetic target in obesity.