In contrast to physiologic biomineralization occurring in bones, teeth and otoconia in vertebrates, calcification of soft tissues occurs in many pathologic conditions. Although similarities have been noted between the two processes, and despite the important clinical consequences of ectopic calcification, the molecular mechanisms regulating ectopic calcification are poorly understood. Although calcification is mainly extracellular, intracellular calcification has been reported and might indeed contribute to pathologic calcification of soft tissues. To better understand the process of intracellular calcification as a potential origin for pathologic calcification, and to examine the role of proteoglycans in this process, we investigated a pattern of intracellular nucleation and growth of hydroxyapatite in Madin-Darby Canine Kidney (MDCK) epithelial cells using electron microscopy, secondary ion mass spectroscopy (NanoSIMS), cytochemical staining, immunolabeling and biochemical analysis. We report here that under mineralizing cell culture conditions where beta-glycerophosphate (betaGP) was added as an exogenous organic source of phosphate, betaGP-cleaving alkaline phosphatase activity increased and hydroxyapatite crystals subsequently nucleated within intracellular, membrane-bounded compartments. The small, leucine-rich proteoglycan decorin was also upregulated and associated with mineral in these cultures. Such information provides insight into the mechanisms leading to pathologic calcification and describes a process whereby hydroxyapatite deposition in cells might lead to ectopic calcification.