Multiple inositol polyphosphate phosphatase (Minpp1) metabolizes inositol 1,3,4,5,6-pentakisphosphate (InsP(5)) and inositol hexakisphosphate (InsP(6)) with high affinity in vitro. However, Minpp1 is compartmentalized in the endoplasmic reticulum (ER) lumen, where access of enzyme to these predominantly cytosolic substrates in vivo has not previously been demonstrated. To gain insight into the physiological activity of Minpp1, Minpp1-deficient mice were generated by homologous recombination. Tissue extracts from Minpp1-deficient mice lacked detectable Minpp1 mRNA expression and Minpp1 enzyme activity. Unexpectedly, Minpp1-deficient mice were viable, fertile, and without obvious defects. Although Minpp1 expression is upregulated during chondrocyte hypertrophy, normal chondrocyte differentiation and bone development were observed in Minpp1-deficient mice. Biochemical analyses demonstrate that InsP(5) and InsP(6) are in vivo substrates for ER-based Minpp1, as levels of these polyphosphates in Minpp1-deficient embryonic fibroblasts were 30 to 45% higher than in wild-type cells. This increase was reversed by reintroducing exogenous Minpp1 into the ER. Thus, ER-based Minpp1 plays a significant role in the maintenance of steady-state levels of InsP(5) and InsP(6). These polyphosphates could be reduced below their natural levels by aberrant expression in the cytosol of a truncated Minpp1 lacking its ER-targeting N terminus. This was accompanied by slowed cellular proliferation, indicating that maintenance of cellular InsP(5) and InsP(6) is essential to normal cell growth. Yet, depletion of cellular inositol polyphosphates during erythropoiesis emerges as an additional physiological activity of Minpp1; loss of this enzyme activity in erythrocytes from Minpp1-deficient mice was accompanied by upregulation of a novel, substitutive inositol polyphosphate phosphatase.