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‐β 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 ∼80–90% less hydroxyapatite (by weight) than cells transfected with empty plasmid or enzymatically inactive PC‐1. ATP‐dependent⁴⁵Ca 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.