A series of novel isochroman mono-carboxylic acid derivatives were synthesized, characterized and evaluated for their ability to inhibit protein tyrosine phosphatase 1B (PTP1B) in vitro in order to use them as potential anti-diabetic agents. Analysis of structure-activity relationships led to the identification of potent compound 4n which inhibited PTP1B with IC(50) value of 51.63+/-0.91 nM. In general, high potency was associated with a dithiolane ring with a spacer of five carbons to the isochroman ring. Compound 4n has been selected for in vivo evaluation as drug candidate for anti-diabetic activity.