Although protein-tyrosine phosphatase 1B (PTP-1B) is a negative regulator of insulin action, adipose tissue from PTP-1B-/- mice does not show enhanced insulin-stimulated insulin receptor phosphorylation. Investigation of glucose uptake in isolated adipocytes revealed that the adipocytes from PTP-1B-/- mice have a significantly attenuated insulin response as compared with PTP-1B+/+ adipocytes. This insulin resistance manifests in PTP-1B-/- animals older than 16 weeks of age and could be partially rescued by adenoviral expression of PTP-1B in null adipocytes. Examination of adipose signaling pathways found that the basal p70S6K activity was at least 50% higher in adipose from PTP-1B-/- mice compared with wild type animals. The increased basal activity of p70S6K in PTP-1B-/- adipose correlated with decreases in IR substrate-1 protein levels and insulin-stimulated Akt/protein kinase B activity, explaining the decrease in insulin sensitivity even as insulin receptor phosphorylation was unaffected. The insulin resistance of the of the PTP-1B-/- adipocytes could also be rescued by treatment with rapamycin, suggesting that in adipose the loss of PTP-1B results in basal activation of mTOR (mammalian target of rapamycin) complex 1 leading to a tissue-specific insulin resistance.