Endochondral ossification is a carefully orchestrated process mediated by promoters and inhibitors of mineralization. Phosphatases are implicated, but their identities and functions remain unclear. Alkaline phosphatase (TNAP) plays a crucial role promoting mineralization of the extracellular matrix by restricting the concentration of the calcification inhibitor inorganic pyrophosphate (PP i ). Mutations in the TNAP gene cause hypophosphatasia, a heritable form of rickets and osteomalacia. Here we show that PHOSPHO1, a phosphatase with specificity for phosphoethanolamine and phosphocholine, plays a functional role in the initiation of calcification and that ablation of PHOSPHO1 and TNAP function prevents skeletal mineralization. Phospho1 −/− mice display growth plate abnormalities, spontaneous fractures, bowed long bones, osteomalacia, and scoliosis in early life. Primary cultures of Phospho1 −/− tibial growth plate chondrocytes and chondrocyte-derived matrix vesicles (MVs) show reduced mineralizing ability, and plasma samples from Phospho1 −/− mice show reduced levels of TNAP and elevated plasma PP i concentrations. However, transgenic overexpression of TNAP does not correct the bone phenotype in Phospho1 −/− mice despite normalization of their plasma PP i levels. In contrast, double ablation of PHOSPHO1 and TNAP function leads to the complete absence of skeletal mineralization and perinatal lethality. We conclude that PHOSPHO1 has a nonredundant functional role during endochondral ossification, and based on these data and a review of the current literature, we propose an inclusive model of skeletal calcification that involves intravesicular PHOSPHO1 function and P i influx into MVs in the initiation of mineralization and the functions of TNAP, nucleotide pyrophosphatase phosphodiesterase-1, and collagen in the extravesicular progression of mineralization. © 2011 American Society for Bone and Mineral Research.