Matrix metalloproteinases (MMPs) play important roles in normal brain development and synaptic plasticity, although aberrant expression of MMPs leads to brain damage, including blood–brain barrier disruption, inflammation, demyelination, and neuronal cell death. In this article, we report that MMP-8 is upregulated in LPS-stimulated BV2 microglial cells and primary cultured microglia, and treatment of MMP-8 inhibitor (M8I) or MMP-8 short hairpin RNA suppresses proinflammatory molecules, particularly TNF-α secretion. Subsequent experiments showed that MMP-8 exhibits TNF-α–converting enzyme (TACE) activity by cleaving the prodomain of TNF-α (A74/Q75, A76/V77 residues) and, furthermore, that M8I inhibits TACE activity more efficiently than TAPI-0, a general TACE inhibitor. Biochemical analysis of the underlying anti-inflammatory mechanisms of M8I revealed that it inhibits MAPK phosphorylation, NF-κB/AP-1 activity, and reactive oxygen species production. Further support for the proinflammatory role of microglial MMP-8 was obtained from an in vivo animal model of neuroinflammatory disorder. MMP-8 is upregulated in septic conditions, particularly in microglia. Administration of M8I or MMP-8 short hairpin RNA significantly inhibits microglial activation and expression/secretion of TNF-α in brain tissue, serum, and cerebrospinal fluid of LPS-induced septic mice. These results demonstrate that MMP-8 critically mediates microglial activation by modulating TNF-α activity, which may explain neuroinflammation in septic mouse brain.