The protein tyrosine phosphatase 1B (PTP1B) modulates tyrosine kinase receptors, among which is the vascular endothelial growth factor receptor type 2 (VEGFR2), a key component of angiogenesis. Because PTP1B deficiency in mice improves left ventricular (LV) function 2 mo after myocardial infarction (MI), we hypothesized that enhanced angiogenesis early after MI via activated VEGFR2 contributes to this improvement. At 3 d after MI, capillary density was increased at the infarct border of PTP1B(-/-) mice [+7±2% vs. wild-type (WT), P = 0.05]. This was associated with increased extracellular signal-regulated kinase 2 phosphorylation and VEGFR2 activation (i.e., phosphorylated-Src/Src/VEGFR2 and dissociation of endothelial VEGFR2/VE-cadherin), together with higher infiltration of proangiogenic M2 macrophages within unchanged overall infiltration. In vitro, we showed that PTP1B inhibition or silencing using RNA interference increased VEGF-induced migration and proliferation of mouse heart microvascular endothelial cells as well as fibroblast growth factor (FGF)-induced proliferation of rat aortic smooth muscle cells. At 8 d after MI in PTP1B(-/-) mice, increased LV capillary density (+21±3% vs. WT; P<0.05) and an increased number of small diameter arteries (15-50 µm) were likely to participate in increased LV perfusion assessed by magnetic resonance imaging and improved LV compliance, indicating reduced diastolic dysfunction. In conclusion, PTP1B deficiency reduces MI-induced heart failure promptly after ischemia by enhancing angiogenesis, myocardial perfusion, and diastolic function.