ENPP1 (ectonucleotide pyrophosphatase/phosphodiesterase-1) is an established regulator of tissue mineralization. Previous studies demonstrated that ENPP1 is expressed in differentiated osteoblasts and that ENPP1 influences matrix mineralization by increasing extracellular levels of inorganic pyrophosphate. ENPP1 is also expressed in osteoblastic precursor cells when stimulated with FGF2, but the role of ENPP1 in preosteoblastic and other precursor cells is unknown. Here we investigate the function of ENPP1 in preosteoblasts. We find that ENPP1 expression is critical for osteoblastic differentiation and that this effect is not mediated by changes in extracellular concentration levels of phosphate or pyrophosphate or ENPP1 catalytic activity. MC3T3E1(C4) preosteoblastic cells, in which ENPP1 expression was suppressed by ENPP1-specific shRNA, and calvarial cells isolated from Enpp1 knock-out mice show defective osteoblastic differentiation upon stimulation with ascorbate, as indicated by a lack of cellular morphological change, a lack of osteoblast marker gene expression, and an inability to mineralize matrix. Additionally, MC3T3E1(C4) cells, in which wild type or catalytic inactive ENPP1 expression was increased, exhibited an increased tendency to differentiate, as evidenced by increased osteoblast marker gene expression and increased mineralization. Notably, treatment of cells with inorganic phosphate or pyrophosphate inhibited, as opposed to enhanced, expression of multiple genes that are expressed in association with osteoblast differentiation, matrix deposition, and mineralization. Our results indicate that ENPP1 plays multiple and distinct roles in the development of mineralized tissues and that the influence of ENPP1 on osteoblast differentiation and gene expression may include a mechanism that is independent of its catalytic activity.