We studied the role of the matrix metalloproteinase gelatinase B (gelB; MMP-9) in epithelial regeneration using the gelB-deficient mouse. We report the novel finding that, in contrast to other MMPs expressed at the front of the advancing epithelial sheet in wounds of cornea, skin, or trachea, gelB acts to inhibit the rate of wound closure. We determined this to be due to control of cell replication, a novel capacity for MMPs not previously described. We also found that gelB delays the inflammatory response. Acceleration of these processes in gelB-deficient mice is correlated with a delay in signal transduction through Smad2, a transcription factor that inhibits cell proliferation, and in accumulation of epithelial-associated interleukin-1alpha, a cytokine that inhibits Smad2 signaling and promotes the inflammatory response. GelB-deficient mice also reveal defects in remodeling of extracellular matrix at the epithelial basement membrane zone, in particular, failure to effectively remove the fibrin(ogen) provisional matrix. We conclude that gelB coordinates and effects multiple events involved in the process of epithelial regeneration.