Nucleoside triphosphate pyrophosphohydrolase (EC 3.6.1.8) activity is associated with matrix vesicles purified from collagenase digests of fetal calf epiphyseal cartilage. This enzyme hydrolyzes nucleoside triphosphates to nucleotides and PPi, the latter inducing precipitation in the presence of Ca2+ and Pi. An assay for matrix vesicle nucleoside triphosphate pyrophosphohydrolase is developed using beta, gamma-methylene ATP as substrate. The assay is effective in the presence of matrix vesicle-associated ATPase, pyrophosphatase, and alkaline phosphatase activities. A soluble nucleoside triphosphate pyrophosphohydrolase is obtained from matrix vesicles by treatment with 5 mM sodium deoxycholate. The solubilized enzyme induced the precipitation of calcium phosphate in the presence of ATP, Ca2+, and Pi. Extraction of deoxycholate-solubilized enzymes from matrix vesicles with 1-butanol destroys nucleoside triphosphate pyrophosphohydrolase activity while enhancing the specific activities of ATPase, pyrophosphatase, and alkaline phosphatase. In solutions devoid of ATP and matrix vesicles, concentrations of PPi between 10 and 100 microM induce calcification in mixtures containing initial Ca2+ X P ion products of 3.5 to 7.9 mM2. This finding plus the discovery of nucleoside triphosphate pyrophosphohydrolase in matrix vesicles supports the view that these extracellular organelles induce calcium precipitation by the enzymatic production of PPi. Nucleoside triphosphate pyrophosphohydrolase is more active against pyrimidine nucleoside triphosphates than the corresponding purine derivatives. The pH optimum is 10.0 and the enzyme is neither activated nor inhibited by Mg2+ or Ca2+ ions or mixtures of the two. Vmax at pH 7.5 for beta, gamma-methylene ATP is 0.012 mumol of substrate hydrolyzed per min per mg of protein and Km is below 10 microM. The enzyme is irreversibly destroyed at pH 4 and is stable at pH 10.5.