The capacity of inflammatory cell-derived matrix metalloproteinases (MMPs) to cleave tissue factor pathway inhibitor (TFPI) and alter its activity was investigated. MMP-7 (matrilysin) rapidly cleaved TFPI to a major 35-kDa product. In contrast, MMP-1 (collagenase-1), MMP-9 (gelatinase B), and MMP-12 (macrophage elastase) cleaved TFPI into several fragments including the 35-kDa band. However, rates of cleavage were most rapid for MMP-7 and MMP-9. NH(2)-terminal amino acid sequencing revealed that MMP-12 cleaved TFPI at Lys(20)-Leu(21)(close to Kunitz I domain and producing a 35-kDa band), Arg(83)-Ile(84) (between Kunitz I and II domains), and Ser(174)-Thr(175) (between Kunitz II and III domains). MMP-7 and MMP-9 cleaved TFPI at Lys(20)-Leu(21) with additional COOH-terminal processing. These MMPs did not cleave tissue factor (TF), factor VII, and factor Xa. Proteolytic cleavage by MMP-1, MMP-7, MMP-9, and MMP-12 resulted in considerable loss of TFPI activity. These observations indicate specific cleavage of TFPI by MMPs, which broadens their substrate profile. Co-localization of MMPs, TF, and TFPI in atherosclerotic tissues suggests that release of MMPs from inflammatory cell leukocytes may effect TF-mediated coagulation.