Protein tyrosine phosphatases (PTPs) play crucial roles in health and disease. Chemical modulators of theiractivity are vital tools to study their function. An important aspect is the accessibility of these tools, which is usually limited or notexistent due to the required, often complex synthesis of the molecules. We describe here a strategy for the development ofcellular active inhibitors and in-cell detection tools for PTP1B as a model PTP, which plays important roles in diabetes, obesity,and cancer. The tool compounds are based on a peptide sequence from PTP1B’s substrate Src, and the resulting compounds arecommercially accessible through standard peptide synthesis. The peptide inhibitor is remarkably selective against a panel ofPTPs. We provide the co-crystal structure of PTP1B with the sequence from Src and the optimized peptide inhibitor, showingthe molecular basis of the interaction of PTP1B with part of its natural substrate and explaining the crucial interactions toenhance binding affinity, which are made possible by simple optimization of the sequence. Our approach enables the broadaccessibility of PTP1B tools to researchers and has the potential for the systematic development of accessible PTP modulators toenable the study of PTPs.