In order to search for protein tyrosine phosphatase 1B (PTP1B) inhibitors as therapy of type 2 diabetes and obesity from Korean traditional prescriptions, we selected 58 traditional prescriptions based on a review of the Korean traditional medicine books. The hot water extracts of Korean traditional prescriptions were screened for the inhibitory activity against PTP1B. Among the tested extracts, water extracts of Jakgamhwangsinbu-tang, Seonbanghwalmyung-eum, and Takreeonjoong-tang showed relatively good inhibitory activity against PTP1B at the concentration of $30{mu}g/ml$. Additionally, we evaluated PTP1B inhibitory effect for each herbal ingredient and composition in Jakgamhwangsinbu-tang (芍甘黃辛附湯). Of the tested ingredients from this herbal medicine, water extracts of Paeoniae Radix rubra and Rhei Rhizoma, and ethanol extracts of Paeoniae Radix alba, Rhei Rhizoma, Asiasari Radix, and Aconiti Tuber showed good PTP1B inhibitory effect. Herbal compositions composed of these active herbal ingredients exhibited significant activity for PTP1B inhibition over 70% at $7.5{mu}g/ml$.