Membrane-type matrix metalloproteinase (MT-MMP), which we have identified recently, is unique in its transmembrane (TM) domain at the C terminus and mediates activation of pro-gelatinase A on the cell surface (Sato, H., Takino, T., Okada, Y., Cao, J., Shinagawa, A., Yamamoto, E., and Seiki, M. (1994) Nature 370, 61-65; Takino, T., Sato, H., Yamamoto, E., and Seiki, M. (1995) Gene (Amst.) 115, 293-298). In addition to MT-MMP, a novel MMP-related cDNA of 2.1 kilobases was isolated from a human placenta cDNA library. The cDNA contains an open reading frame for a new MMP. The deduced protein composed of 604 amino acids was closely related to MT-MMP in the amino acid sequence (66% homology at the catalytic domains) and has a potential TM domain at the C terminus. Monoclonal antibodies raised against the synthetic peptide recognized a 64-kDa protein as the major product in the transfected cells. TIMP-1 fused with the potential TM domain was localized on the cell surface while native TIMP-1 is in the culture medium. Thus, we called the second membrane-type MMP, MT-MMP-2 and renamed MT-MMP, MT-MMP-1. MT-MMP-1 and -2 are thought to form a distinct membrane-type subclass in the MMP family since all the others are secreted as soluble forms. Like MT-MMP-1, expression of MT-MMP-2 induced processing of pro-gelatinase A (68-kDa in gelatin zymography) into the activated form of 62-kDa fragments through a 64-kDa intermediate form. Expression of MT-MMP-2 mRNA was at the highest levels in the brain where MT-MMP-1 was at the lowest level compared to other tissues. MT-MMP-1 and -2 are thought to be utilized for extracellular matrix turnover on the surface of cells under different genetic controls.