We tested the hypothesis that hyperinsulinemia induces suppression of protein tyrosine phosphatase 1B (PTP1B) function, leading to enhanced PDGF receptor signaling and neointimal hyperplasia. Rats were implanted with insulin-releasing or sham pellets. Blood glucose, insulin, food and water intake, body weight and blood pressures were measured. Neointimal hyperplasia was assessed by computerized morphometry, 14 d after carotid balloon injury. PTP1B protein expression in injured arteries was determined via Western blot analysis whereas PTP1B activity was determined via an immunophosphatase assay. Serum insulin levels were 2-3-fold greater in hyperinsulinemic rats whereas systolic blood pressures, food and water intake, serum triglyceride, plasma cortisol and urinary catecholamine levels were not affected. Fourteen days after injury, neointima-to-media area ratio was 0.89 ± 0.23 and 1.35 ± 0.22 in control and hyperinsulinemic rats, respectively (p < 0.01). PTP1B protein levels and total PTP1B activity in injured carotid arteries from insulin-treated group were significantly decreased 7 or 14 d after injury whereas PTP1B specific activity was decreased only 14 d after injury. These findings were associated with decreased PTP1B mRNA levels and increased PDGF receptor tyrosyl phosphorylation in insulin-treated rats. These observations support the hypothesis that hyperinsulinemia induces suppression of PTP1B function, leading to enhanced PDGF receptor signaling and neointimal hyperplasia.