Summary. Background: Matrix Gla protein (MGP) is a small vitamin K-dependent protein containing five γ-carboxyglutamic acid (Gla) residues that are believed to be important in binding Ca2+, calcium crystals and bone morphogenetic protein. In addition, MGP contains phosphorylated serine residues that may further regulate its activity. In vivo, MGP has been shown to be a potent inhibitor of vascular calcification; however, the precise molecular mechanism underlying the function of MGP is not yet fully understood. Methods and results: We investigated the effects of MGP in human vascular smooth muscle cell (VSMC) monolayers that undergo calcification after exposure to an increase in Ca2+ concentration. Increased calcium salt deposition was found in cells treated with the vitamin K antagonist warfarin as compared to controls, whereas cells treated with vitamin K1 showed decreased calcification as compared to controls. With conformation-specific antibodies, it was confirmed that warfarin treatment of VSMCs resulted in uncarboxylated (Gla-deficient) MGP. To specifically test the effects of MGP on VSMC calcification, we used full-length synthetic MGP and MGP-derived peptides representing various domains in MGP. Full length MGP, the γ-carboxylated motif (Gla) (amino acids 35–54) and the phosphorylated serine motif (amino acids 3–15) inhibited calcification. Furthermore, we showed that the peptides were not taken up by VSMCs but bound to the cell surface and to vesicle-like structures. Conclusions: These data demonstrate that both γ-glutamyl carboxylation and serine phosphorylation of MGP contribute to its function as a calcification inhibitor and that MGP may inhibit calcification via binding to VSMC-derived vesicles.