Several protein tyrosine phosphatases (PTPases) have been implicated as regulatory agents in the insulin-stimulated signal transduction pathway, including PTP1B, PTPalpha, and LAR. Furthermore, since all three enzymes are suggested to serve as negative regulators of insulin signaling, one or more may play a pivotal role in the pathogenesis of insulin resistance. We report herein the acquisition of highly selective PTP1B-targeted inhibitors. We recently demonstrated that PTP1B contains two proximal aromatic phosphate binding sites [Puius, Y. A., Zhao, Y., Sullivan, M., Lawrence, D. S., Almo S. C., and Zhang, Z. Y. (1997) Proc. Natl. Acad. Sci. U.S.A. 94, 13420-5], and we have now employed this structural feature to design and synthesize an array of bis(aryldifluorophosphonates). Not only do the lead compounds serve as potent inhibitors of PTP1B but, in addition, several exhibit selectivities for PTP1B versus PTPalpha, LAR, and VHR that are greater than 2 orders in magnitude.