The structural similarity between papaverine and berberine, a known inhibitor of human protein tyrosine phosphatase 1B (h-PTP 1B), prompted us to investigate the potential of papaverine as h-PTP 1B inhibitor. The investigation included simulated docking experiments to fit papaverine into the binding pocket of h-PTP 1B. Papaverine was found to readily dock within the binding pocket of h-PTP 1B in a low energy orientation via an optimal set of attractive interactions. Experimentally, papaverine illustrated potent in vitro inhibitory effect against recombinant h-PTP 1B (IC₅₀=1.20 μM). In vivo, papaverine significantly decreased fasting blood glucose level of Balb/c mice. Our findings should encourage screening of other natural alkaloids for possible anti-h-PTP 1B activities.