Matrix metalloproteinases (MMPs) constitute a class of extracellular-matrix-degrading enzymes overexpressed in many cancers and contribute to the metastatic ability of the cancer cells. We have recently demonstrated that liposomal contents can be released when triggered by the enzyme MMP-9. Herein, we report the results of our mechanistic studies of the MMP-9-triggered release of liposomal contents. We synthesized peptides containing the cleavage site for MMP-9 and conjugated them with fatty acids to prepare the corresponding lipopeptides. By employing circular dichroism (CD) spectroscopy, we demonstrated that the lipopeptides, when incorporated into liposomes, are demixed in the lipid bilayers and generate triple-helical structures. MMP-9 cleaves the triple-helical peptides, leading to the release of the liposomal contents. Other MMPs, which cannot hydrolyze triple-helical peptides, fail to release the contents from the liposomes. We also observed that the rate and extent of release of the liposomal contents depend on the mismatch between the acyl chains of the synthesized lipopeptide and phospholipid components of the liposomes. CD spectroscopic studies imply that the observed differences in the release reflect the ability of the liposomal membrane to anneal the defects following the enzymatic cleavage of the liposome-incorporated lipopeptides.