Protein tyrosine phosphatase 1B (PTP1B) is involved in multiple signaling pathways by down-regulating several tyrosine kinases. For example, gene-targeting studies in mice have established PTP1B as a critical physiologic regulator of metabolism by attenuating insulin signaling. PTP1B is an important target for the treatment of diabetes, because the PTP1B null mice are resistant to diet-induced diabetes and obesity. On the other hand, despite the potential for enhanced oncogenic signaling in the absence of PTP1B, PTP1B null mice do not develop spontaneous tumors. Because the majority of human cancers harbor mutations in p53, we generated p53/PTP1B double null mice to elucidate the role of PTP1B in tumorigenesis. We show that genetic ablation of PTP1B in p53 null mice decreases survival rate and increases susceptibility towards the development of B lymphomas. This suggested a role for PTP1B in lymphopoiesis, and we report that PTP1B null mice have an accumulation of B cells in bone marrow and lymph nodes, which contributed to the increased incidence of B lymphomas. The mean time of tumor development and tumor spectrum are unchanged in p53-/-PTP1B+/- mice. We conclude that PTP1B is an important determinant of the latency and type of tumors in a p53-deficient background through its role in the regulation of B-cell development.