Potent nonpeptidic benzimidazole sulfonamide inhibitors of protein tyrosine phosphatase 1B (PTP1B) were derived from the optimization of a tripeptide containing the novel (S)-isothiazolidinone ((S)-IZD) phosphotyrosine (pTyr) mimetic. An X-ray cocrystal structure of inhibitor 46/PTP1B at 1.8 Å resolution demonstrated that the benzimidazole sulfonamides form a bidentate H bond to Asp48 as designed, although the aryl group of the sulfonamide unexpectedly interacts intramolecularly in a pi-stacking manner with the benzimidazole. The ortho substitution to the (S)-IZD on the aryl ring afforded low nanomolar enzyme inhibitors of PTP1B that also displayed low caco-2 permeability and cellular activity in an insulin receptor (IR) phosphorylation assay and an Akt phosphorylation assay. The design, synthesis, and SAR of this novel series of benzimidazole sulfonamide containing (S)-IZD inhibitors of PTP1B are presented herein.