Carboxyalkyl peptides containing a biphenylylethyl group at the P1' position were found to be potent inhibitors of stromelysin-1 (MMP-3) and gelatinase A (MMP-2), in the range of 10-50 nM, but poor inhibitors of collagenase (MMP-1). Combination of a biphenylylethyl moiety at P1', a tert-butyl group at P2', and a methyl group at P3' produced orally bioavailable inhibitors as measured by an in vivo model of MMP-3 degradation of radiolabeled transferrin in the mouse pleural cavity. The X-ray structure of a complex of a P1-biphenyl inhibitor and the catalytic domain of MMP-3 is described. Inhibitors that contained halogenated biphenylylethyl residues at P1' proved to be superior in terms of enzyme potency and oral activity with 2(R)-[2-(4'-fluoro-4-biphenylyl)ethyl]-4(S)-n-butyl-1,5-pentane dioic acid 1-(alpha(S)-tert-butylglycine methylamide) amide (L-758,354, 26) having a Ki of 10 nM against MMP-3 and an ED50 of 11 mg/kg po in the mouse pleural cavity assay. This compound was evaluated in acute (MMP-3 and IL-1 beta injection in the rabbit) and chronic (rat adjuvant-induced arthritis and mouse collagen-induced arthritis) models of cartilage destruction but showed activity only in the MMP-3 injection model (ED50 = 6 mg/kg iv).