The ecto-nucleoside pyrophosphatase phosphodiesterase 1 (NPP1/PC-1) is a member of the NPP enzyme family critical in regulating mineralization. In certain mineralizing sites of bone and cartilage, membrane-limited vesicles (matrix vesicles: MVs) provide a sheltered internal environment for nucleation of calcium-containing crystals including hydroxyapatite (HA). MV formation occurs by budding of vesicles from the plasma membrane of mineralizing cells. The MVs are enriched in proteins that promote mineralization. Paradoxically, NPP1 the type II transmembrane protein that generates the potent HA crystal growth inhibitor inorganic pyrophosphate (PP_I) is also enriched in MVs. Though osteoblasts express NPP1-3 only NPP1 is enriched in MVs. Therefore, this study investigated how NPP1 preferentially targets to MVs, using mineralizing human osteoblastic SaOS-2 cells, a panel of NPP1 mutants, and NPP1 chimeras with NPP3, which does not concentrate in MVs. We demonstrated that a cytosolic di-leucine motif (amino acids 49-50) was critical in localizing NPP1 to regions of the plasma membrane that budded off into MVs. Moreover, transposition of the NPP1 cytoplasmic di-leucine motif and flanking region (AAASLLAP) to NPP3 conferred to NPP3 the ability to target to the plasma membrane and subsequently concentrate in MVs. Functionally the cytosolic tail di-leucine motif NPP1 mutants lost the ability both to support MV PP_i concentrations and to suppress calcification. The results identify a specific targeting motif in the NPP1 cytosolic tail that delivers PP_i-generating NPP activity to osteoblast MVs for control of calcification.