As growth plate chondrocytes mature and hypertrophy, they reorganize their proteoglycan-rich type II collagen extracellular matrix (ECM), involving 1,25(OH)2D3-dependent regulation of matrix metalloproteinases (MMPs). Stromelysin-1 (MMP-3) and 72-kD gelatinase (MMP-2) are found in extracellular matrix vesicles (MVs) and release and activate ECM-bound latent TGF-β1 and TGF-β2, respectively. 1,25(OH)2D3 regulates incorporation of MMP-2 and MMP-3 into MVs and release of these enzymes in the ECM. Plasma membranes (PMs) and MVs contain the 1α,25(OH)2D3 membrane receptor ERp60 (protein disulfide isomerase A3), phospholipase A2 (PLA2), PLA2-activating protein, the nuclear vitamin D receptor and caveolin-1. 1,25(OH)2D3 secreted by chondrocytes binds MV ERp60, activating PLA2. Resulting lysophospholipids destabilize MV membranes, releasing active MMPs. We examined 1,25(OH)2D3-dependent activation of latent TGF-β1 stored in cartilage ECM. Interestingly, TGF-β1 regulates 1,25(OH)2D3 production. 1α,25(OH)2D3 activates PM protein kinase C (PKC)-α via ERp60-dependent PLA2-signaling, lysophospholipid production and phospholipase C-γ. It also regulates distribution of phospholipids and PKC isoforms between MVs and PMs, enriching MVs in PKC-ζ. Direct activation of MV MMP-3 requires ERp60 based on blocking antibodies and PKC based on inhibitor studies. However, treatment of MVs with 1,25(OH)2D3 decreases MV PKC-ζ activity, suggesting more complex feedback mechanisms, potentially involving MV lipid signaling. Our observations indicate that one role of MVs is to provide MMPs at sites distant from the cells. Chondrocytes secrete 1,25(OH)2D3, which acts directly on MV-membranes via ERp60, releasing MMPs. MMP-specific ECM components are hydrolyzed, resulting in release and activation of growth factors that can act back on the cells.