Expression of PTHrP is a major regulator of growth cartilage development and also becomes robust in osteoarthritic cartilage. We further defined how PTHrP 1-173, which we observed to be the preferentially expressed PTHrP isoform in normal and osteoarthritic cartilage, functions in chondrocytes. We transfected both immortalized human juvenile costal chondrocytes (TC28 cells) and rabbit articular chondrocytes with wild-type PTHrP 1-173 and mutants of putative PTHrP 1-173 endoproteolytic processing sites. Wild-type PTHrP 1-173 inhibited collagen synthesis and decreased extracellular PPi (which critically regulates hydroxyapatite deposition) by 50-80% in both chondrocytic cell types. In contrast, PTHrP 1-173 mutated at the PTHrP 147-150 motif KKKK (but not the other site-directed mutants) and increased both extracellular PPi and collagen synthesis by >50%. Synthetic PTHrP 140-173 mutated at amino acids 147-150 and also increased extracellular PPi, and wild-type 140-173 decreased extracellular PPi in permeabilized cells. The 147-nuclear localization of PTHrP. We conclude that the tetrabasic 147-150 motif functions to determine how PTHrP 1-173 regulates collagen synthesis and levels of extracellular PPi by an intracrine mechanism in chondrocytes, and it may prove useful as a therapeutic target for regulation of mineralization.