PHOSPHO1 is a phosphoethanolamine/phosphocholine phosphatase that has previously been implicated in generating inorganic phosphate (P(i)) for matrix mineralization. In this study, we have investigated PHOSPHO1 mRNA expression during embryonic development in the chick. Whole-mount in situ hybridization indicated that PHOSPHO1 expression occurred prior to E6.5 and was initially restricted to the bone collar within the mid-shaft of the diaphysis of long bones but by E11.5 expression was observed over the entire length of the diaphysis. Alcian blue/alizarin red staining revealed that PHOSPHO1 expression seen in the primary regions of ossification preceded the deposition of mineral, suggesting that it is involved in the initial events of mineral formation. We isolated MVs from growth plate chondrocytes and confirmed the presence of high levels of PHOSPHO1 by immunoblotting. Expression of PHOSPHO1, like TNAP activity, was found to be up-regulated in MVs isolated from chondrocytes induced to differentiate by the addition of ascorbic acid. This suggests that both enzymes may be regulated by similar mechanisms. These studies provide for the first time direct evidence that PHOSPHO1 is present in MVs, and its developmental expression pattern is consistent with a role in the early stages of matrix mineralization.