Targeted molecular dynamics was used to examine the mechanism of WPD loop closure in PTP1B. which is essential for the activity of the enzyme. Two important regions are identified: the R-loop (residues 113-118), which assists in substrate binding, and the S-loop (residues 198-209), which undergoes a conformational change that appears to be vital for the movement of the WPD loop. The S-loop is adjacent to the alpha 3-helix, and its conformational change is coupled with a change of interactions between the alpha 3- and alpha 7-helices. This latter observation is of particular interest in connection with a novel class of allosteric inhibitors of PTP1B [Wiesmann et al., Nat. Struc. Mol. Biol. 11 (2004) 730-737]. These compounds prevent the closure of the WPD loop, forcing the enzyme to remain in a catalytically inactive conformation, by blocking the rearrangement of the alpha 3-helix relative to the alpha 7-helix. (c) 2006 Elsevier Inc. All rights reserved.