TRACP is an enzyme with unknown biological function. It is expressed primarily in bone-resorbing osteoclasts and activated macrophages. In addition to its phosphatase activity, TRACP is capable of generating reactive oxygen species (ROS). In resorbing osteoclasts, TRACP is localized in transcytotic vesicles transporting bone matrix degradation products from the resorption lacuna to a functional secretory domain in the basolateral membrane. ROS generated by TRACP are capable of destroying organic bone matrix components, suggesting that they may be targeted to further destroy initial matrix degradation products in the transcytotic vesicles. The transcytotic route of osteoclasts is analogous with the antigen presentation route of macrophages transporting endocytosed foreign material into cell surface for presentation to other cells of the immune system. Macrophages overexpressing TRACP have elevated levels of intracellular ROS. In alveolar macrophages, TRACP is colocalized with endocytosed Staphylococcus aureus, a pathogen whose clearance is reduced in TRACP-deficient mice, suggesting that ROS generated by TRACP may be targeted to destroy foreign material in the antigen presentation route of macrophages. These data suggest that the ROS generating activity of TRACP may have an important role both in bone resorption and in the immune defense system.