To clarify its physiologic role, alkaline phosphatase (ALP) was examined in normal skin fibroblasts and was shown to be the tissue-nonspecific (TNS) isoenzyme type (as evidenced by heat and inhibition profiles) and to be active toward millimolar concentrations of the putative natural substrates phosphoethanolamine (PEA) and pyridoxal-5'-phosphate (PLP). Fibroblast ALP has a low-affinity activity, with a distinctly alkaline pH optimum (9.3), toward 4-methylumbelliferyl phosphate (4-MUP), PEA, and PLP but a more physiologic pH optimum (8.3) toward physiologic concentrations (micromolar) of PEA and PLP. Normal fibroblast ALP is linked to the outside of the plasma membrane, since in intact cell monolayers (1) dephosphorylation rates of the membrane-impermeable substrates PEA and PLP in the medium at physiologic pH were similar to those observed with disrupted cell monolayers, (2) brief exposure to acidic medium resulted in greater than 90% inactivation of the total ALP activity, and (3) digestion with phosphatidylinositol-specific phospholipase C (PI-PLC) released about 80% of the ALP activity. Hypophosphatasia fibroblasts were markedly deficient (2%-5% control values) in alkaline and physiologic ALP activity when 4-MUP, PLP, and PEA were used as substrate. The majority of the detectable ALP activity, however, appeared to be properly lipid anchored in ecto-orientation. Thus, our findings of genetic deficiency of PEA- and PLP-phosphatase activity in hypophosphatasia fibroblasts, as well as our biochemical findings, indicate that TNS-ALP acts physiologically as a lipid-anchored PEA and PLP ectophosphatase.