A naturally occurring nonsense truncation mutation of the inorganic pyrophosphate (PPi)-generating nucleoside triphosphate pyrophosphohydrolase (NTPPPH) PC-1 is associated with spinal and periarticular ligament hyperostosis and cartilage calcification in "tiptoe walking" (ttw) mice. Thus, we tested the hypothesis that PC-1 acts directly in the extracellular matrix to restrain mineralization. Cultured osteoblastic MC3T3 cells expressed PC-1 mRNA and produced hydroxyapatite deposits at 12-14 days. NTPPPH activity increased steadily over 14 days. Transforming growth factor-beta and 1,25-dihydroxyvitamin D3 increased PC-1 and NTPPPH in matrix vesicles (MVs). Because PC-1/NTPPPH was regulated in mineralizing MC3T3 cells, we stably transfected or infected cells with recombinant adenovirus, in order to express 2- to 6-fold more PC-1. PC-1/NTPPPH and PPi content increased severalfold in MVs derived from cells transfected with PC-1. Furthermore, MC3T3 cells transfected with PC-1 deposited approximately 80-90% less hydroxyapatite (by weight) than cells transfected with empty plasmid or enzymatically inactive PC-1. ATP-dependent 45Ca precipitation by MVs from cells overexpressing active PC-1 was comparably diminished. Thus, regulation of PC-1 controls the PPi content and function of osteoblast-derived MVs and matrix hydroxyapatite deposition. PC-1 may provide a novel therapeutic target in certain disorders of bone mineralization.