Nitric oxide (NO) exerts its biological function through S-nitrosylation of cellular proteins. Due to the labile nature of this modification under physiological condition, identification of S-nitrosylated residue in enzymes involved in signaling regulation remains technically challenging. The present study investigated whether intrinsic NO produced in endothelium-derived MS-1 cells response to insulin stimulation might target endogenous protein tyrosine phosphatases (PTPs). For this, we have developed an approach using a synthetic reagent that introduces a phenylacetamidyl moiety on S-nitrosylated Cys, followed by detection with anti-phenylacetamidyl Cys (PAC) antibody. Coupling with sequential blocking of free thiols with multiple iodoacetyl-based Cys-reactive chemicals, we employed this PAC-switch method to show that endogenous SHP-2 and PTP1B were S-nitrosylated in MS-1 cells exposed to insulin. The mass spectrometry detected a phenylacetamidyl moiety specifically present on the active-site Cys463 of SHP-2. Focusing on the regulatory role of PTP1B, we showed S-nitrosylation to be the principal Cys reversible redox modification in endothelial insulin signaling. The PAC-switch method in an imaging format illustrated that a pool of S-nitrosylated PTP1B was colocalized with activated insulin receptor to the cell periphery, and that such event was endothelial NO synthase (eNOS)-dependent. Moreover, ectopic expression of the C215S mutant of PTP1B that mimics the active-site Cys215 S-nitrosylated form restored insulin responsiveness in eNOS-ablated cells, which was otherwise insensitive to insulin stimulation. This work not only introduces a new method that explores the role of physiological NO in regulating signal transduction, but also highlights a positive NO effect on promoting insulin responsiveness through S-nitrosylation of PTP1B's active-site Cys215.