In osteoclasts, TRACP co-localized with cathepsin K in transcytotic vesicles and was activated by cathepsin K in vitro, suggesting that TRACP may degrade organic matrix components in transcytotic vesicles in an event regulated by cathepsin K.Introduction: TRACP is an enzyme with unknown biological function. In addition to its phosphatase activity, TRACP is capable of generating reactive oxygen species (ROS). Bone-resorbing osteoclasts contain large amounts of TRACP, and transgenic animal models suggest that TRACP has a role in bone resorption. Osteoclasts resorb bone by secreting acid and lysosomal enzymes such as cathepsin K into an extracellular resorption lacuna between the cell membrane and bone surface. Matrix degradation products are then endocytosed, transcytosed, and secreted through a functional secretory domain in the basolateral membrane facing bone marrow. Materials and Methods:We have studied intracellular localization of TRACP in osteoclasts with antibodies against various known endosomal and lysosomal proteins using confocal microscopy. We also studied co-localization of TRACP with cathepsin K and endocytosed bone matrix components and the effect of cathepsin K digestion on the ROS generating activity of TRACP in vitro. Results: Double-staining experiments of TRACP with endosomal and lysosomal markers showed that, although some endosomal staining was detected, TRACP was not present in lysosomes. However, TRACP was present in transcytotic vesicles, where it co-localized with cathepsin K. Cathepsin K digestion of TRACP in vitro increased the phosphatase activity by 5.6-fold and the ROS generating activity by 2.0-fold. Conclusions: These results suggest that cathepsin K may activate the ROS-generating activity of TRACP in transcytotic vesicles of resorbing osteoclasts, the ROS being targeted to finalize degradation of organic bone matrix components during their transcytosis.