Bone specific proteins, including vitamin K-dependent proteins, are found in calcified tissues outside the skeleton suggesting that the mechanism of ectopic calcification is similar to osteogenesis in the skeleton. Differentiation of cells into bone forming cells (osteoblasts) is central to the calcification process. Therefore, an understanding of the factors involved in osteoblast differentiation and how this process is regulated is essential for therapeutic interventions designed to prevent pathological calcification of the arterial system. The main focus of this grant is to understand the involvement of the vitamin K-dependent protein, Matrix Gla protein (MGP), in bone formation. Recent experiments have demonstrated that MGP is an important calcification inhibitor of the arterial system and cartilage. Importantly, its regulatory role in the calcification process has been shown to be dependent upon the vitamin K modification of the protein, which links its function to vitamin K metabolism, function and vitamin K nutrition. We have been able to show that MGP is a binding protein for bone morphogenetic protein-2 (BMP-2), a growth factor that will transform mesenchymal cells and subpopulations of vascular smooth muscle cells in the arterial wall into bone forming cells. We propose that MGP regulates the growth factor activity of BMP-2. We demonstrate that the Gla region on MGP is a binding site for BMP-2 and hypothesize that the vitamin K modification of MGP is essential for neutralizing the growth factor activity of BMP-2. We propose experiments to test this hypothesis in cell culture and in a rat model where arterial calcification can be induced by the vitamin K antagonist warfarin. Binding interactions between MGP and BMP-2 will be studied with Surface Plasmon Resonance (SPR). MGP is an insoluble 14 kDa matrix protein. We show that an intracellular form of MGP appears as a soluble 50 kDa protein and we propose experiments to reveal how this precursor is processed into its 14 kDa insoluble form. 35S-Met labeling of cell protein combined with a proteomic MS/MS approach will be used. We propose that oxidative stress damages the vitamin K-dependent gamma-carboxylation system in atherosclerotic plaques and the aging vessel wall resulting in inadequate gamma-carboxylation of MGP and onset of pathological calcification. This hypothesis will be tested in a rabbit atherosclerosis model and in aging rats. The proposed work will provide basic knowledge of BMP-2 growth factor mediated calcification as it is linked to the function of a fat-soluble vitamin (vitamin K) and biosynthesis of vitamin K-dependent proteins.