Mineralisation of bone and cartilage is essential for skeletal development and function. We have previously reported a novel gene (PHOSPHO1); a member of the large haloacid dehalogenase superfamily of hydrolases which has an active site indicative of a phosphatase. Its high expression in skeletal tissues has led us to speculate that PHOSPHO1 may be involved in the mineralisation process. Therefore, in this study, we have determined that PHOSPHO1 is localized to sites of mineralisation in both cartilage and bone. Recombinant derived PHOSPHO1 protein was produced and affinity purified PHOSPHO1 antiserum was generated and used to immunostain a range of skeletal and soft avian tissues. In addition, PHOSPHO1 gene expression was determined in SaOS-2 and MG-63 osteoblast-like cells by RT-PCR. In diaphyseal cortical bone, immunohistochemistry localized PHOSPHO1 protein to the osteoid layer of the periosteum, forming surfaces of growing osteons, and newly formed osteocytes, whereas the endosteum and closed osteons were negative. In growth plate cartilage, immunoreactivity was limited to the early hypertrophic chondrocytes and the ossification groove of Ranvier. Cartilage remnants and trabecular bone within the primary spongiosa exhibited strong immunoreactivity on their mineralising surfaces. In 17-day-old embryonic calvaria, the osteoid present on the intramembranous and periosteal bone surfaces stained positively for PHOSPHO1. All soft tissues examined were negative. PHOSPHO1 gene expression was detected in mineralising SaOS-2 but not in the non-mineralising MG-63 osteoblast-like cells and gene expression levels were unchanged by dexamethasone, estradiol, 1,25-dihydroxyvitamin D3 or PTHrP treatment. Western analysis of chick growth plate cell lysate yielded bands (30.4 and 28.6 kD) corresponding to transcripts initiated at each of two possible initiation codons indicating the presence of alternative transcripts for PHOSPHO1 in growth cartilage. These results confirm that the PHOSPHO1 protein and gene expression profile is consistent with a role for PHOSPHO1 in bone and cartilage matrix mineralisation.