The probability that free PP4-i and the complex MgPP2-i are substrates in PPi phosphohydrolysis by human placental alkaline orthophosphatase (EC 188.8.131.52) has been investigated. Experiments were performed in which the concentration of Mg, PPi, and 4-nitrophenylphosphate varied. The hydrolysis of the phosphorylated compounds was determined, both separately and combined. The results were interpreted in terms of the equilibrium species of mixtures containing Mg and PPi. It was found that the PPi species and the phosphomonoester competed as substrates for the same binding site, and that free PP4-i would be the only PPi species consistent with all experimental data. Independent evidence for free PP4-i as the real substrate was the identity between the value of Km for the hydrolysis of free PP4-i and the value of Ki for free PP4-i as an ordinary, competitive inhibitor of 4-nitrophenylphosphate hydrolysis. Apparently free Mg2+ did not influence the binding of the substrates, 4-nitrophenylphosphate and free PP4-i, to the enzyme.