Patients with ESRD have a high circulating calcium (Ca) x phosphate (P) product and develop extensive vascular calcification that may contribute to their high cardiovascular morbidity. However, the cellular mechanisms underlying vascular calcification in this context are poorly understood. In an in vitro model, elevated Ca or P induced human vascular smooth muscle cell (VSMC) calcification independently and synergistically, a process that was potently inhibited by serum. Calcification was initiated by release from living VSMC of membrane-bound matrix vesicles (MV) and also by apoptotic bodies from dying cells. Vesicles released by VSMC after prolonged exposure to Ca and P contained preformed basic calcium phosphate and calcified extensively. However, vesicles released in the presence of serum did not contain basic calcium phosphate, co-purified with the mineralization inhibitor fetuin-A and calcified minimally. Importantly, MV released under normal physiologic conditions did not calcify, and VSMC were also able to inhibit the spontaneous precipitation of Ca and P in solution. The potent mineralization inhibitor matrix Gla protein was found to be present in MV, and pretreatment of VSMC with warfarin markedly enhanced vesicle calcification. These data suggest that in the context of raised Ca and P, vascular calcification is a modifiable, cell-mediated process regulated by vesicle release. These vesicles contain mineralization inhibitors derived from VSMC and serum, and perturbation of the production or function of these inhibitors would lead to accelerated vascular calcification.