 This acts as a means of driving selectivity, as substrates containing smaller phosphoresidues cannot reach the site of catalytic activity at the base of the cleft.Upon substrate binding, PTP1B undergoes a structural modification in which the WPD loop closes around the substrate, introducing stabilizing pi stacking interactions between the aromatic rings of the phosphotyrosine (pTyr) substrate residue and the Phe182 residue on the WPD loop.The phosphatase activity of PTP1B occurs via a two-step mechanism.