Tumor necrosis factor-alpha (TNF-(alpha)) is an important mediator during the inflammatory phase of wound healing. Excessive amounts of pro-inflammatory cytokines such as TNF-(alpha) are associated with inflammatory diseases including chronic wounds. Matrix metalloproteinases (MMPs) are involved in matrix re-modeling during wound healing, angiogenesis and tumor metastasis. As with pro-inflammatory cytokines, high levels of MMPs have been found in inflammatory states such as chronic wounds. In this report we relate these two phenomena. TNF-(alpha) stimulates secretion of active MMP-2, a type IV collagenase, in organ-cultured full-thickness human skin. This suggests a mechanism whereby excess inflammation affects normal wound healing. To investigate this observation at the cellular and molecular levels, we examined TNF-(alpha) mediated activation of pro-MMP-2, induction of MT1-MMP, and the intracellular signaling pathways that regulate the proteinase in isolated human dermal fibroblasts. We found that TNF-(alpha) substantially promoted activation of pro-MMP-2 in dermal fibroblasts embedded in type-I collagen. In marked contrast, collagen or TNF-(alpha) individually had little influence on the fibroblast-mediated pro-MMP-2 activation. One well-characterized mechanism for pro-MMP-2 activation is through a membrane type matrix metalloproteinase, such as MT1-MMP. We report that TNF-(alpha) significantly induced MT1-MMP at the mRNA and protein levels when the dermal fibroblasts were grown in collagen. Although the intracellular signaling pathway regulating mt1-mmp gene expression is still obscure, both TNF-(alpha) and collagen activate the NF-(kappa)B pathway. In this report we provide three sets of evidence to support a hypothesis that activation of NF-(kappa)B is essential to induce MT1-MMP expression in fibroblasts after TNF-(alpha) exposure. First, SN50, a peptide inhibitor for NF-(kappa)B nuclear translocation, simultaneously blocked the TNF-(alpha) and collagen mediated MT1-MMP induction and pro-MMP-2 activation. Secondly, TNF-(alpha) induced I(kappa)B to breakdown in fibroblasts within the collagen lattice, a critical step leading to NF-(kappa)B activation. Lastly, a consensus binding site for p65 NF-(kappa)B (TGGAGCTTCC) was found in the 5'-flanking region of human mt1-mmp gene. Based on these results and previous reports, we propose a model to explain TNF-(alpha) activation of MMP-2 in human skin. Activation of NF(kappa)B signaling in fibroblasts embedded in collagen induces mt1-mmp gene expression, which subsequently activates the pro-MMP-2. The findings provide a specific mechanism whereby TNF-(alpha) may affect matrix remodeling during wound healing and other physiological and pathological processes.