Protein tyrosine phosphatases (PTPs) constitute a diverse family of enzymes that, together with protein tyrosine kinases, control the level of intracellular tyrosine phosphorylation, thus regulating many cellular functions. PTP1B negatively regulates insulin signaling, in part, by dephosphorylating key tyrosine residues within the regulatory domain of the beta-subunit of the insulin receptor, thereby attenuating receptor kinase activity. Inhibitors of PTP1B would therefore have the potential of prolonging the phosphorylated (activated) state of the insulin receptor and are anticipated to be a novel treatment of the insulin resistance characteristic of type 2 diabetes. We previously reported a series of small molecular weight peptidomimetics as competitive inhibitors of PTP1B, with the most active analogues having K(i) values in the low nanomolar range. Furthermore, we confirmed that the O-carboxymethyl salicylic acid moiety is a remarkably effective novel phosphotyrosine mimetic. Because of the low cell permeability of this compound class, it was important to investigate the possibility of replacing one or both of the remaining carboxyl groups while maintaining PTP1B inhibitory activity. The analogues described herein further support the importance of an acidic functionality at both positions of the tyrosine head moiety. An important discovery was the ortho tetrazole analogue 29 (K(i) = 2.0 microM), which was equipotent to the dicarboxylic acid analogue 2 (K(i) = 2.0 microM). Solution of the X-ray cocrystal structure of the ortho tetrazole analogue 29 bound to PTP1B revealed that the tetrazole moiety is well-accommodated in the active site and binds in a fashion similar to the ortho carboxylate analogue 2 reported previously. This novel monocarboxylic acid analogue revealed significantly higher Caco-2 cell permeability as compared to all previous compounds. Furthermore, compound 29 exhibited modest enhancement of insulin-stimulated 2-deoxyglucose uptake by L6 myocytes.