Trodusquemine (MSI-1436) causes rapid and reversible weight loss in genetic models of obesity. To better predict the potential effects of trodusquemine in the clinic, we investigated the effects of trodusquemine treatment in a murine model of diet-induced obesity (DIO). Trodusquemine suppressed appetite, reduced body weight (BW) in a fat-specific manner, and improved plasma insulin and leptin levels in mice. Screening assays revealed that trodusquemine selectively inhibited protein-tyrosine phosphatase 1B (PTP1B), a key enzyme regulating insulin and leptin signaling. Trodusquemine significantly enhanced insulin-stimulated tyrosine phosphorylation of insulin receptor (IR) beta and STAT3, direct targets of PTP1B, in HepG2 cells in vitro and/or hypothalamic tissue in vivo. These data establish trodusquemine as an effective central and peripheral PTP1B inhibitor with the potential to elicit noncachectic fat-specific weight loss and improve insulin and leptin levels.