Matrix metalloproteinase 3 (MMP3) is well known as a secretory endopeptidase that degrades extracellular matrices. Recent reports indicated the presence of MMPs in the nucleus (A. J. Kwon et al., FASEB J. 18:690-692, 2004); however, its function has not been well investigated. Here, we report a novel function of human nuclear MMP3 as a trans regulator of connective tissue growth factor (CCN2/CTGF). Initially, we cloned MMP3 cDNA as a DNA-binding factor for the CCN2/CTGF gene. An interaction between MMP3 and transcription enhancer dominant in chondrocytes (TRENDIC) in the CCN2/CTGF promoter was confirmed by a gel shift assay and chromatin immunoprecipitation. The CCN2/CTGF promoter was activated by overexpressed MMP3, whereas a TRENDIC mutant promoter lost the response. Also, the knocking down of MMP3 suppressed CCN2/CTGF expression. By cytochemical and histochemical analyses, MMP3 was detected in the nuclei of chondrocytic cells in culture and also in the nuclei of normal and osteoarthritic chondrocytes in vivo. The nuclear translocation of externally added recombinant MMP3 and six putative nuclear localization signals in MMP3 also were shown. Furthermore, we determined that heterochromatin protein gamma coordinately regulates CCN2/CTGF by interacting with MMP3. The involvement of this novel role of MMP3 in the development, tissue remodeling, and pathology of arthritic diseases through CCN2/CTGF regulation thus is suggested.