Protein tyrosine phosphatase 1B (PTP1B) is a non-transmembrane protein tyrosine phosphatase that has come into focus as a critical regulator of multiple signaling pathways. The role of PTP1B in breast cancer remains unclear with evidence suggesting that PTP1B can exert both tumor-suppressing and tumor-promoting effects. To better define the role of PTP1B in human breast cancer, and its relationship with HER2, we performed immunohistochemical studies on a large cohort of functionally annotated primary breast cancer specimens. 683 of 1,402 (49 %) evaluable primary breast cancers are positive for PTP1B. There is no statistically significant association between PTP1B expression and age, tumor size, T stage, histologic grade, lymph node status, or histological subtype. Of note, there is no significant association between PTP1B expression and HER2 expression (PTP1B expression 53.1 % in HER2(+) cancers vs. 47.5 % in HER2(-) cancers, p = 0.0985). However, PTP1B expression is significantly associated with estrogen receptor expression (PTP1B expression 50.7 % in ER(+) cancers vs. 43.1 % in ER(-) cancers, p = 0.0137) and intrinsic molecular subtype (PTP1B expression 53.9 % in the luminal B HER2(+) subtype and 37.9 % in the basal-like subtype). Of note, multivariate analyses demonstrate that PTP1B is an independent predictor of improved survival in breast cancer (HR 0.779, p = 0.006). Taken together, we demonstrate in the largest study to date that (1) PTP1B is commonly expressed in breast cancer, (2) there is no association or functional impact of PTP1B expression in HER2(+) breast cancer, and (3) PTP1B expression in breast cancer is associated with significantly improved clinical outcome. Until additional studies are performed, caution should be exercised in using PTP1B inhibitors in human breast cancer.