PTP1B is an important negative regulator of insulin and other signaling pathways in mammals. However, the role of PTP1B in the regulation of RAS-MAPK signaling remains open to deliberation, due to conflicting evidence from different experimental systems. The Drosophila orthologue of mammalian PTP1B, PTP61F, has until recently remained largely uncharacterized. To establish the potential role of PTP61F in the regulation of signaling pathways in Drosophila and particularly to help resolve its fundamental function in RAS-MAPK signaling, we generated a new allele of Ptp61F as well as employed both RNA interference and overexpression alleles. Our results validate recent data showing that the activity of insulin and Abl kinase signaling is increased in Ptp61F mutants and RNA interference lines. Importantly, we establish negative regulation of the RAS/MAPK pathway by Ptp61F activity in whole animals. Of particular interest, our results document the modulation of hyperactive MAP kinase activity by Ptp61F alleles, showing that the phosphatase intervenes to directly or indirectly regulate MAP kinase itself.