Membrane type 1 matrix metalloproteinase (MT1-MMP) is expressed on cancer cell membranes and activates the zymogen of MMP-2 (gelatinase A). We have recently isolated MT1-MMP complexed with tissue inhibitor of metalloproteinases 2 (TIMP-2) and demonstrated that MT1-MMP exhibits gelatinolytic activity by gelatin zymography (Imai, K., Ohuchi, E., Aoki, T., Nomura, H., Fujii, Y., Sato, H., Seiki, M., and Okada, Y. (1996) Cancer Res. 56, 2707-2710). In the present study, we have further purified to homogeneity a deletion mutant of MT1-MMP lacking the transmembrane domain (DeltaMT1) and native MT1-MMP secreted from a human breast carcinoma cell line (MDA-MB-231 cells) and examined their substrate specificities. Both proteinases are active, without any treatment for activation, and digest type I (guinea pig), II (bovine), and III (human) collagens into characteristic 3/4 and 1/4 fragments. The cleavage sites of type I collagen are the Gly775-Ile776 bond for alpha1(I) chains and the Gly775-Leu776 and Gly781-Ile782 bonds for alpha2(I) chains. DeltaMT1 hydrolyzes type I collagen 6.5- or 4-fold more preferentially than type II or III collagen, whereas MMP-1 (tissue collagenase) digests type III collagen more efficiently than the other two collagens. Quantitative analyses of the activity of DeltaMT1 and MMP-1 indicate that DeltaMT1 is 5-7.1-fold less efficient at cleaving type I collagen. On the other hand, gelatinolytic activity of DeltaMT1 is 8-fold higher than that of MMP-1. DeltaMT1 also digests cartilage proteoglycan, fibronectin, vitronectin and laminin-1 as well as alpha1-proteinase inhibitor and alpha2-macroglobulin. The activity of DeltaMT1 on type I collagen is synergistically increased with co-incubation with MMP-2. These results indicate that MT1-MMP is an extracellular matrix-degrading enzyme sharing the substrate specificity with interstitial collagenases, and suggest that MT1-MMP plays a dual role in pathophysiological digestion of extracellular matrix through direct cleavage of the substrates and activation of proMMP-2.