The ubiquitous nucleotide pyrophosphatases/phosphodiesterases NPP1-3 consist of a short intracellular N-terminal domain, a single transmembrane domain and a large extracellular part, comprising two somatomedin-B-like domains, a catalytic domain and a poorly defined C-terminal domain. We show here that the C-terminal domain of NPP1-3 is structurally related to a family of DNA/RNA non-specific endonucleases. However, none of the residues that are essential for catalysis by the endonucleases are conserved in NPP1-NPP3, suggesting that the nuclease-like domain of NPP1-3 does not represent a second catalytic domain. Truncation analysis revealed that the nuclease-like domain of NPP1 is required for protein stability, for the targeting of NPP1 to the plasma membrane and for the expression of catalytic activity. We also demonstrate that 16 conserved cysteines in the somatomedin-B-like domains of NPP1, in concert with two flanking cysteines, mediate the dimerization of NPP1. The K173Q polymorphism of NPP1, which maps to the second somatomedin-B-like domain and has been associated with the aetiology of insulin resistance, did not affect the dimerization or catalytic activity of NPP1, and did not endow NPP1 with an affinity for the insulin receptor. Our data suggest that the non-catalytic ectodomains contribute to the subunit structure, stability and function of NPP1-3.