X-linked hypophosphatemia (XLH) and the Hyp-mouse disease homolog are caused by inactivating mutations of Phex which results in the local accumulation of an unknown autocrine/paracrine factor in bone that inhibits mineralization of extracellular matrix. In these studies, we evaluated whether the matrix phosphoglycoprotein MEPE, which is increased in calvaria from Hyp mice, is a substrate for Phex. Using recombinant full-length Phex (rPhexWT) produced in Sf9 cells, we failed to observe Phex-dependent hydrolysis of recombinant human MEPE (rMEPE). Rather, we found that rPhex-WT inhibited cleavage of rMEPE by endogenous cathepsin-like enzyme activity present in Sf9 membrane. Sf9 membranes as well as purified cathepsin B cleaved MEPE into two major fragments of ∼50 and ∼42kDa. rPhexWT protein in Sf9 membrane fractions, co-incubation of rPhexWT and cathepsin B, and pre-treatment of Sf9 membranes with leupeptin prevented the hydrolysis of MEPE in vitro. The C-terminal domain of Phex was required for inhibition of MEPE cleavage, since the C-terminal deletion mutant rPhex (1–433) [rPhex3^′M] failed to inhibit Sf9-dependent metabolism of MEPE. Phex-dependent inhibition of MEPE degradation, however, did not require Phex enzymatic activity, since EDTA, an inhibitor of rPhex, failed to block rPhexWT inhibition of MEPE cleavage by Sf9 membranes. Since we were unable to identify interactions of Phex with MEPE or actions of Phex to metabolize cathepsin B, Phex may be acting to interfere with the actions of other enzymes that degrade extracellular matrix proteins. Although the molecular mechanism and biological relevance of non-enzymatic actions of Phex need to be established, these findings indicate that MEPE may be involved in the pathogenesis defective mineralization due to Phex deficiency in XLH and the Hyp-mouse.