Protein tyrosine phosphatase nonreceptor type 2 (PTPN2) has been identified as an inflammatory bowel disease (IBD) candidate gene. However, the mechanism through which mutations in the PTPN2 gene contribute to the pathogenesis of IBD has not been identified. PTPN2 acts as a negative regulator of signaling induced by the proinflammatory cytokine, interferon‐gamma (IFN‐γ). IFN‐γ is known not only to play an important role in the pathogenesis of Crohn's disease (CD), but also to increase permeability of the intestinal epithelial barrier. We have shown that PTPN2 protects epithelial barrier function by restricting the capacity of IFN‐γ to increase epithelial permeability and prevent induction of expression of the pore‐forming protein, claudin‐2. These data identify an important functional role for PTPN2 as a protector of the intestinal epithelial barrier and provide clues as to how PTPN2 mutations may contribute to the pathophysiology of CD.