Widespread endochondral and intramembranous ectopic bone formation is mediated by extracellular PP(i) deficiency that develops in ank/ank mice. Herein we report on the rapid condensation into chondrogenic nodules of cultured ank/ank bone marrow stromal cells (BMSCs). We compared the roles of increased chondrogenic potential versus altered osteoblast function in the ank/ank phenotype. To do so, we crossbred ank/ank mice with mice lacking Vanin-1 pantetheinase, which inhibits synthesis of the chondrogenesis regulator glutathione, since we observed increased Vanin-1 expression and pantetheinase activity and decreased glutathione in ank/ank BMSCs. Vnn1(-/-) BMSCs demonstrated delayed chondrogenesis mediated by increased glutathione. Moreover, increased chondrogenesis of ank/ank BMSCs and increased chondrogenic transdifferentiation and calcification by ank/ank aortic smooth muscle cells and explants were corrected by Vanin-1 knockout. Osteoblastogenesis was accelerated in ank/ank mesenchymal stem cells. However, in cultured ank/ank osteoblasts, Vanin-1 knockout actually increased specific alkaline phosphatase activity and lowered extracellular PP(i), and did not correct increased calcification. Moreover, Vanin-1 knockout failed to correct the ank/ank skeletal soft tissue phenotype. Therefore, ank/ank periskeletal soft tissue calcification appears more dependent on altered osteoblastic function than enhanced chondrogenic potential and is not dependent on Vanin-1; however, Vanin-1 regulates chondrogenesis via glutathione metabolism and is critical for accelerated chondrogenesis of ank/ank mesenchymal precursors and P(i) donor-driven chondrogenic transdifferentiation and calcification of aortic smooth muscle cells.