Type 2 diabetes mellitus has grown to become one of the most important global health challenges, resulting in increased efforts to treat patients with lifestyle changes and pharmacotherapy. Protein tyrosine phosphatases are a promising therapeutic target to treat type 2 diabetes mellitus, considering their role in dephosphorylating insulin receptors. Protein tyrosine phosphatase 1B is a class 1 protein tyrosine phosphatase which has been the main target for inhibition in recent decades; however, inhibitors designed thus far have yet to achieve optimal specificity and bioavailability. Thus, novel therapeutic targets—such as low molecular protein tyrosine phosphatase—are being considered in the treatment for type 2 diabetes mellitus. Low molecular protein tyrosine phosphatase is suggested as a negative regulator of insulin receptor signaling which is functionally distinct from other protein tyrosine phosphatases. It has been shown that low molecular protein tyrosine phosphatase knockout-mice with high-fat diet-induced diabetes had significantly improved glucose tolerance compared to wild-type mice. Furthermore, an orally bioavailable small-molecule inhibitor of low molecular protein tyrosine phosphatase was able to effectively reverse obesity-induced diabetes. These findings suggest low molecular protein tyrosine phosphatase inhibitors could be a tangible therapeutic in improving insulin sensitivity and glycemic control. Despite encouraging results, further research should be performed to study potential side-effects of low molecular protein tyrosine phosphatase inhibition. With continued optimization, low molecular protein tyrosine phosphatase could prove to be a viable oral drug for type 2 diabetic patients.