Regulation of the activity of proteolytic enzymes is of major importance in the turnover of connective tissues. The search for physiologically relevant activation mechanisms of principal tissue-degrading enzymes, e.g., metalloproteinases, has therefore been of wide interest. We have now studied whether the initiating factor of the fibrinolytic system, urokinase plasminogen activator (u-PA), may also function in the early steps of activation of one of the metalloproteinases, the M(r) 72,000 gelatinase/type IV collagenase produced by cultured fibroblasts. Treatment of the secreted M(r) 72,000 proteinase by u-PA yielded a cleavage product of M(r) 62,000 as revealed by fluorography of radioactively labeled proteins as well as by gelatin zymography SDS-PAGE gels. The u-PA-catalyzed cleavage of the M(r) 72,000 proteinase was blocked by anti-u-PA antibodies, but was unaffected by the plasmin inhibitor aprotinin, thus indicating a specific action for the activator. On the contrary, the tissue activator of plasminogen, t-PA, did not cleave the type IV collagenase in similar assays. u-PA-catalyzed cleavage of recombinant type IV collagenase, produced in a baculovirus expression system, yielded a similar M(r) 62,000 activity in gelatinolysis assay. Zymograms of the isolated pericellular matrices of cultured fibroblasts also revealed M(r) 72,000 gelatinolytic polypeptide that was converted to an M(r) 62,000 form by u-PA. Both polypeptides were recognized in immunoblotting by antibodies against the gelatinase/type IV collagenase, suggesting immunological identity with the secreted enzyme. Thus the M(r) 72,000 gelatinase/type IV collagenase is not only secreted, but also deposited into the pericellular fibroblast matrix, and both forms are substrates for u-PA. The results suggest a new potential role for u-PA as a direct regulator of metalloproteinase-mediated extracellular proteolysis via the cleavage of the M(r) 72,000 gelatinase/type IV collagenase to an M(r) 62,000 form.