Cole disease is a rare disease; its prevalence is unknown. Only a few affected families have been described in the medical literature.

Cole disease is caused by mutations in the ENPP1 gene. This gene provides instructions for making a protein that helps to prevent minerals, including calcium, from being deposited in body tissues where they do not belong. It also plays a role in controlling cell signaling in response to the hormone insulin, through interaction between a part of the ENPP1 protein called the SMB2 domain and the insulin receptor. The insulin receptor is a protein that attaches (binds) to insulin and initiates cell signaling.

Insulin plays many roles in the body, including regulating blood sugar levels by controlling how much sugar (in the form of glucose) is passed from the bloodstream into cells to be used as energy. Cell signaling in response to insulin is also important for the maintenance of the outer layer of skin (the epidermis). It helps control the transport of the pigment melanin from the cells in which it is produced (melanocytes) to epidermal cells called keratinocytes, and it is also involved in the development of keratinocytes.

The mutations that cause Cole disease change the structure of the SMB2 domain, which alters its interaction with the insulin receptor and affects cell signaling. The resulting impairment of ENPP1's role in melanin transport and keratinocyte development leads to the hypopigmentation and keratoderma that occurs in Cole disease. The mutations may also impair ENPP1's control of calcification, which likely accounts for the abnormal calcium deposits that occur in some people with this disorder. For reasons that are unclear, the changes in insulin signaling resulting from these ENPP1 gene mutations do not seem to affect blood sugar control.