Human fibroblasts and HT-1080 fibrosarcoma cells express membrane-type-1 matrix metalloproteinase (MT1-MMP), the cell surface activator of gelatinase A, in separate forms of 63 kDa, 60 kDa and in some cases 43 kDa. In the present work the interrelationships between MT1-MMP processing and gelatinase A activation were analysed using HT-1080 fibrosarcoma cells as a model. It was found that MT1-MMP was synthesized as a 63 kDa protein, which was constitutively processed to a 60 kDa active enzyme with N-terminal Tyr112, as shown by immunoprecipitation, immunoblotting and sequence analyses. Co-immunoprecipitation results indicated that only the active 60 kDa form of MT1-MMP bound gelatinase A at the cell surface. Both the activation of pro-MT1-MMP and the membrane binding of the tissue inhibitor of metalloproteinases type 2 (TIMP-2) and gelatinase A, and subsequent activation of gelatinase A, were inhibited by calcium ionophores. Although the active MT1-MMP was required for cell surface binding and activation of gelatinase A, it was inefficient in activating gelatinase A in fibroblasts or in control HT-1080 cells alone. Low expression levels of TIMP-2 and rapid synthesis of MT1-MMP were found to be critical for gelatinase A activation. In HT-1080 cells, MT1-MMP was further processed to an inactive, 43 kDa cell surface form when overexpressed, or when the cells were treated with PMA. Under these conditions, the activated gelatinase A was detected in the culture medium, in cell membrane extracts and in MT1-MMP-containing complexes. These results indicate that proteolytic processing (activation and degradation/inactivation) of MT1-MMP and MT1-MMP/TIMP-2 relationships at the cell surface are important regulatory levels in the control of gelatinolytic activity.