We show that activated collagenase (MMP-1) moves processively on the collagen fibril. The mechanism of movement is a biased diffusion with the bias component dependent on the proteolysis of its substrate, not adenosine triphosphate (ATP) hydrolysis. Inactivation of the enzyme by a single amino acid residue substitution in the active center eliminates the bias without noticeable effect on rate of diffusion. Monte Carlo simulations using a model similar to a "burnt bridge" Brownian ratchet accurately describe our experimental results and previous observations on kinetics of collagen digestion. The biological implications of MMP-1 acting as a molecular ratchet tethered to the cell surface suggest new mechanisms for its role in tissue remodeling and cell-matrix interaction.