Simian virus 40 (SV40)-transformed human lung fibroblasts secrete both 72-kDa type IV collagenase and a closely related 92-kDa type IV collagenase that was not detected in the parental cell line. The 92-kDa type IV procollagenase purified from these cells exists in a noncovalent complex with the tissue inhibitor of metalloproteases, TIMP. Here we report that the 72-kDa type IV procollagenase purified from HRAS-transformed human bronchial epithelial cells, SV40-transformed lung fibroblasts, and normal skin fibroblasts exists in a stable but noncovalent stoichiometric complex with a 24-kDa inhibitor referred to here as "TIMP-2." TIMP-2 is closely related to TIMP, as demonstrated by comparison of the partial amino acid sequence of this protein to that of TIMP, although it does not cross-react with TIMP-specific antibody. The TIMP-2 inhibitor interacts with the 72-kDa type IV collagenase in preference to the 92-kDa type IV collagenase that forms a complex exclusively with TIMP. The 72-kDa type IV collagenase-TIMP-2 complex can be activated with organomercurials to yield a catalytically competent enzyme. Activation occurs concomitantly with autoproteolytic cleavage of the amino terminus of the protein and does not require dissociation of the complex. Both activity and activation of the complex can be completely inhibited by further addition of stoichiometric quantities of purified TIMP-2 or recombinant TIMP.