Initial rates of PPi hydrolysis by cytosolic and mitochondrial inorganic pyrophosphatases of rat liver have been measured in the presence of 0.2-100 microM MgPPi and 0.01-50 mM Mg2+ at pH 7.2 to 9.3. The apparently simplest model consistent with the data for both enzymes implies that they bind substrate, in the form of MgPPi, and three Mg2+ ions, of which two are absolutely required for activity. The third metal ion facilitates substrate binding but decreases maximal velocity for the cytosolic enzyme, while substrate binding is only modulated for the mitochondrial enzyme. The model is also applicable to bovine heart mitochondrial pyrophosphatases. The active form of the substrate for the cytosolic pyrophosphatase is MgP2O7(-2); the catalytic and metal-binding steps require a protonated group with pKa = 9.2 and an unprotonated group with pKa = 8.8, respectively. The results indicate that the mitochondrial pyrophosphatase is more sensitive to variations of Mg2+ concentration in rat liver cells than is the cytosolic one.