Membrane type 1 (MT1) matrix metalloproteinase (MMP-14)is a membrane-tethered MMP considered to be a major mediator of pericellular proteolysis. MT1-MMP is regulated by a complex array of mechanisms, including processing and endocytosis that determine the pool of active proteases on the plasma membrane. Autocatalytic processing of active MT1-MMP generates an inactive membrane-tethered 44-kDa product (44-MT1) lacking the catalytic domain. This form preserves all other enzyme domains and is retained at the cell surface. Paradoxically, accumulation of the 44-kDa form has been associated with increased enzymatic activity. Here we report that expression of a recom- Membrane type 1 matrix metalloproteinase (MT1-MMP, 2 MMP-14) is a type I-transmembrane protease and a major mediator of pericellular proteolysis. MT1-MMP is responsible for the proteolytic cleavage of multiple pericellular and membrane-associated substrates, including collagens and other extracellular matrix proteins, growth factors, growth factor receptors, cell adhesion proteins and their receptors, cytokines, protease inhibitors, and proteases, just to mention a few (1-5). MT1-MMP is also the major physiological activator of pro-MMP-2 (pro-gelatinase A) on the cell surface (6, 7), a process that further contributes to pericellular proteolysis. As a multifunctional protease, MT1-MMP elicits profound effects on cell behavior and has been implicated in the pathogenesis of various human diseases, including cancer (8 -10), diabetes (11, 12), vascular (13, 14), and connective tissue diseases (2).The importance of MT1-MMP for pericellular proteolysis demands a tight control of its catalytic activity at the cell surface. This is partly achieved by the action of endogenous protease inhibitors, the tissue inhibitors of metalloproteinases (TIMPs), which bind to the active site inhibiting catalysis (15). In addition, by virtue of being a membrane-anchored protease, MT1-MMP developed a unique set of regulatory mechanisms that control enzymatic activity independently of TIMPs. These processes include the targeting of active enzyme to specific plasma membrane locations, endocytosis, and autocatalytic processing (1, 16 -19). Together, these distinct processes determine the level of active enzyme on the cell surface. However, how these processes are integrated to control the pool of active MT1-MMP is not understood.The processing of MT1-MMP is a cell surface event in which the active enzyme is usually autocatalytically cleaved in trans to generate a major membrane-anchored product of ϳ44 kDa (also referred to as the 43-or 45-kDa species in some studies) and a soluble ϳ18-kDa inactive fragment of the catalytic domain (6, 20 -25). The 44-kDa product of MT1-MMP is detected in cultured cells expressing natural MT1-MMP (20, 26 -32) and has been found in platelets (33), human tumors extracts (34 -36), and extracts of arthritic synovial tissues (37). MT1-MMP processing is stimulated by a variety of factors known to stimulate MT1-MMP expression, trafficking, and/or endocytosi...