The protein tyrosine phosphatases (PTPs) constitute a family of closely related key regulatory enzymes that dephosphorylate phosphotyrosine residues in their protein substrates. Malfunctions in PTP activity are linked to various diseases, ranging from cancer to neurological disorders and diabetes. Consequently, PTPs have emerged as promising targets for therapeutic intervention in recent years. In this review, general aspects of PTPs and the development of small-molecule inhibitors of PTPs by both academic research groups and pharmaceutical companies are discussed. Different strategies have been successfully applied to identify potent and selective inhibitors. These studies constitute the basis for the future development of PTP inhibitors as drugs.