Phosphorylated platelet-derived growth factor (PDGF) receptor becomes internalized and then is dephosphorylated by protein-tyrosine phosphatase (PTP) 1B at the endoplasmic reticulum (ER). However, it remains unclear where PTP1B dephosphorylates insulin receptor and inhibits its activity. To clarify how and where PTP1B could interact with insulin receptor, we overexpressed a phosphatase-inactive mutant, PTP1BC/S, in 3T3-L1 adipocytes. Although PDGF receptor was maximally associated with PTP1BC/S at 30 min after PDGF stimulation, the maximal association of insulin receptor with PTP1BC/S was attained at 5 min after insulin stimulation. Furthermore, dansylcadaverine, a blocker of receptor internalization, inhibited this PDGF-induced association of PTP1BC/S with its receptor. However, dansylcadaverine did not affect the insulin-stimulated association of PTP1BC/S with insulin receptor, as well as dephosphorylation of insulin receptor by PTP1B. These results indicate that PTP1B might interact with insulin receptor and deactivate it without internalization. Finally, we overexpressed the wild-type and cytosolic-form of PTP1B to determine the role of ER-anchoring of PTP1B, and found that both inhibited insulin signaling equally. Thus, our data indicate that localization of PTP1B at the ER is not needed for insulin receptor dephosphorylation by PTP1B.