Growth factor receptor-bound protein 14 (Grb14) is an adapter protein implicated in receptor tyrosine kinase signaling. Grb14−/− studies highlight both the positive and negative roles of Grb14 in receptor tyrosine kinase signaling in a tissue-specific manner. In this study, we made a novel finding that Grb14 inhibits the activity of PTP1B, the major negative regulator of insulin receptor (IR) signaling, in a phosphorylation-regulated manner. Phosphorylation of Tyr-347 in the BPS domain of Grb14 is critical for interaction with PTP1B, resulting in the competitive inhibition of PTP1B activity. We also found that rhodopsin-regulated Src kinase activation in retina leads to the phosphorylation of Grb14. Further, ablation of Grb14 resulted in significantly elevated retinal PTP1B activity in vivo. PTP1B is known to be regulated by oxidation, glutathionylation, phosphorylation, and SUMOlyation, and our study for the first time demonstrates the inhibition of PTP1B activity in vivo by protein molecule Grb14 in a tissue-specific manner.