Along with degradation of type IV collagen in basement membrane, destruction of the stromal collagens, types I and III, is an essential step in the invasive/metastatic behavior of tumor cells, and it is mediated, at least in part, by interstitial collagenase 1 (matrix metalloproteinase 1 (MMP-1)). Because A2058 melanoma cells produce substantial quantities of MMP-1, we used these cells as models for studying invasion of type I collagen. With a sensitive and quantitative in vitro invasion assay, we monitored the ability of these cells to invade a matrix of type I collagen and the ability of a serine proteinase inhibitor and all-trans-retinoic acid to block invasion. Although these cells produce copious amounts of MMP-1, they do not invade collagen unless they are co-cultured with fibroblasts or with conditioned medium derived from fibroblasts. Our studies indicate that a proteolytic cascade that depends on stromal/tumor cell interactions facilitates the ability of A2058 melanoma cells to invade a matrix of type I collagen. This cascade activates latent MMP-1 and involves both serine proteinases and MMPs, particularly stromelysin 1 (MMP-3). All-trans-retinoic acid (10(-6) M) suppresses the invasion of tumor cells by several mechanisms that include suppression of MMP synthesis and an increase in levels of tissue inhibitor of metalloproteinases 1 and 2. We conclude that invasion of stromal collagen by A2058 melanoma cells is mediated by a novel host/tumor cell interaction in which a proteolytic cascade culminates in the activation of pro-MMP-1 and tumor cell invasion.