Mutations in the tissue-nonspecific alkaline phosphatase (TNSALP) gene cause hypophosphatasia (HPP), an inborn error of metabolism characterized by defects in bone and teeth mineralization accompanying subnormal levels of serum alkaline phosphatase activity. Missense mutations at position 420 of TNSALP (standard nomenclature), which convert glycine to serine [TNSALP (G420S)] or alanine [TNSALP (G420A)], have been reported in perinatal and childhood HPP, respectively. When expressed in COS-1 cells, both TNSALP mutants were indistinguishable from wild-type TNSALP [TNSALP (W)] as evidenced by immunofluorescence and western blotting. Nevertheless, the two TNSALP mutants did not show substantial alkaline phosphatase activity. In agreement with transiently transfected cells, TNSALP (G420S) expressed in a Tet-On inducible expression system lacked its alkaline phosphatase activity, although this mutant was anchored to the cell surface lipid bilayers by glycosylphosphatidylinositol as an 80 kDa mature form bearing complex-type oligosaccharides like TNSALP (W). Importantly, TNSALP (G420S) was found to largely fail to assemble into the homodimer in contrast to TNSALP (W). Taken together, these results demonstrate that the glycine residue at position 420 is crucial for the subunit interaction of TNSALP and hence its catalytic function without affecting trafficking of monomeric TNSALP. We conclude that the dimerization defect is the molecular basis for perinatal HPP associated with the genotype G420S/G420S.