In this paper, radial basis functions that are compactly supported and give rise to positive definite interpolation matrices for scattered data are discussed. They are related to the well-known thin plate spline radial functions which are highly useful in applications for gridfree approximation methods. Also, encouraging approximation results for the compactly supported radial functions are shown.1991 Mathematics subject classification: 41A05, 41A25, 41A63, 42A82, 65D05, 65D07.