We have established a proteoliposome system as an osteoblast-derived matrix vesicle (MV) biomimetic to facilitate the study of the interplay of tissue-nonspecific alkaline phosphatase (TNAP) and NPP1 (nucleotide pyrophosphatase/phosphodiesterase-1) during catalysis of biomineralization substrates. First, we studied the incorporation of TNAP into liposomes of various lipid compositions (i.e. in pure dipalmitoyl phosphatidylcholine (DPPC), DPPC/dipalmitoyl phosphatidylserine (9:1 and 8:2), and DPPC/dioctadecyl-dimethylammonium bromide (9:1 and 8:2) mixtures. TNAP reconstitution proved virtually complete in DPPC liposomes. Next, proteoliposomes containing either recombinant TNAP, recombinant NPP1, or both together were reconstituted in DPPC, and the hydrolysis of ATP, ADP, AMP, pyridoxal-5'-phosphate (PLP), p-nitrophenyl phosphate, p-nitrophenylthymidine 5'-monophosphate, and PP(i) by these proteoliposomes was studied at physiological pH. p-Nitrophenylthymidine 5'-monophosphate and PLP were exclusively hydrolyzed by NPP1-containing and TNAP-containing proteoliposomes, respectively. In contrast, ATP, ADP, AMP, PLP, p-nitrophenyl phosphate, and PP(i) were hydrolyzed by TNAP-, NPP1-, and TNAP plus NPP1-containing proteoliposomes. NPP1 plus TNAP additively hydrolyzed ATP, but TNAP appeared more active in AMP formation than NPP1. Hydrolysis of PP(i) by TNAP-, and TNAP plus NPP1-containing proteoliposomes occurred with catalytic efficiencies and mild cooperativity, effects comparable with those manifested by murine osteoblast-derived MVs. The reconstitution of TNAP and NPP1 into proteoliposome membranes generates a phospholipid microenvironment that allows the kinetic study of phosphosubstrate catabolism in a manner that recapitulates the native MV microenvironment.