The hypoxic tumor environment has been shown to be critical to cancer metastasis through the promotion of angiogenesis, induction of epithelial-mesenchymal transition (EMT), and acquisition of invasive potential. However, the impact of hypoxia on the expression profile of the proteolytic enzymes involved in invasiveness is relatively unknown. Membrane-type 4 matrix metalloproteinase (MT4-MMP) is a glycosyl-phosphatidyl inositol-anchored protease that has been shown to be overexpressed in human cancers. However, detailed mechanisms regarding the regulation and function of MT4-MMP expression in tumor cells remain unknown. Here, we demonstrate that hypoxia or overexpression of hypoxia-inducible factor-1alpha (HIF-1alpha) induced MT4-MMP expression in human cancer cells. Activation of SLUG, a transcriptional factor regulating the EMT process of human cancers, by HIF-1alpha was critical for the induction of MT4-MMP under hypoxia. SLUG regulated the transcription of MT4-MMP through direct binding to the E-box located in its proximal promoter. Short-interference RNA-mediated knockdown of MT4-MMP attenuated in vitro invasiveness and in vivo pulmonary colonization of tumor cells without affecting cell migratory ability. MT4-MMP promoted invasiveness and pulmonary colonization through modulation of the expression profile of MMPs and angiogenic factors. Finally, coexpression of HIF-1alpha and MT4-MMP in human head and neck cancer was predictive of a worse clinical outcome. These findings establish a novel signaling pathway for hypoxia-mediated metastasis and elucidate the underlying regulatory mechanism and functional significance of MT4-MMP in cancer metastasis.