Activation of matrix metalloproteinase (MMP)-2, the 72-kd collagenase IV/gelatinase A, is involved in extracellular matrix remodeling. It has been suggested that a membrane-type MMP (MT-MMP-1) and the tissue inhibitor of metalloproteinase (TIMP)-2 are involved in MMP-2 processing, but the exact mechanism(s) of its activation remains unclear. We have investigated the role of cell-cell cooperation in the activation of pro-MMP-2 in the liver, using pure cultures and co-cultures of hepatocytes and hepatic stellate cells (HSCs). Northern blot analysis and in situ hybridization showed that, in both pure and co-cultures, HSCs, but not hepatocytes, expressed MMP-2, TIMP-2, and MT-MMP-1 mRNA. Zymography analyses revealed the latent form of MMP-2 in medium from 2-day-old pure HSC cultures with higher amounts in medium from hepatocyte/HSC co-cultures. When hepatocytes were added to 10-day-old HSC cultures, the activated form of MMP-2 was detected, concomitantly with the deposition of an abundant extracellular matrix. Incubation of plasma membrane-enriched fractions from hepatocytes with conditioned medium from pure HSC cultures generated the activated species of MMP-2 (62 and 59 kd). Activation of pro-MMP-2 by hepatocyte membranes was inhibited by EDTA, heat, and trypsin but not by serine proteinase inhibitors. These data show that the co-expression of TIMP-2, MMP-2, and MT-MMP-1 by HSCs does not lead to secretion of the activated form of MMP-2. Hepatocytes, which do not express MMP-2, TIMP-2, or MT-MMP-1, induce MMP-2 activation through a plasma membrane-dependent mechanism(s), thus suggesting that cell-cell interactions are involved in this process in vivo.