Membrane-type matrix metalloproteinase I (MT1-MMP)-deficient mice were found to have severe defects in skeletal development and angiogenesis. The craniofacial, axial, and appendicular skeletons were severely affected, leading to a short and domed skull, marked deceleration of postnatal growth, and death by 3 wk of age. Shortening of bones is a consequence of decreased chondrocyte proliferation in the proliferative zone of the growth plates. Defective vascular invasion of cartilage leads to enlargement of hypertrophic zones of growth plates and delayed formation of secondary ossification centers in long bones. In an in vivo corneal angiogenesis assay, null mice did not have angiogenic response to implanted FGF-2, suggesting that the defect in angiogenesis is not restricted to cartilage alone. In tissues from null mice, activation of latent matrix metalloproteinase 2 was deficient, suggesting that MT1-MMP is essential for its activation in vivo.