Accumulation of excess inorganic pyrophosphate in cartilage matrix leads to calcium pyrophosphate dihydrate crystal deposits. Recent animal and human studies now support a role for physiologic extracellular pyrophosphate levels in preventing ectopic apatite calcification in joints and extracellular tissues. Extracellular pyrophosphate is likely generated by ectoenzymes and/or is a consequence of transport of intracellular pyrophosphate to the extracellular space. Generation of pyrophosphate by chondrocytes is modulated by aging, several soluble growth factors and cytokines, and transglutaminase. The transduction mechanisms involved in regulating pyrophosphate metabolism include protein kinase C and adenylyl cyclase. It appears that regulation of extracellular pyrophosphate levels within a narrow range is complex and necessary for appropriate mineral homeostasis in articular and nonarticular tissues.