Stromelysin-3 (ST3), a matrix metalloproteinase (MMP) expressed in aggressive carcinomas, has been shown to promote tumor development in different in vivo experimental models. However, the inability of its mature form to degrade extracellular matrix components casts doubt on whether ST3 functions in vivo as a protease. In this study, we evaluated whether the ST3 tumor-promoting effect could be ascribed to its proteolytic activity and whether this putative protease could be targeted with MMP inhibitors. Catalytically inactive mutant cDNA of human (h) ST3 or mouse (m) ST3 were generated and transfected into MCF7 cells. When injected into nude mice in the presence of matrigel, the mutant-bearing cells did not exhibit the enhanced tumorigenicity elicited by MCF7 cells transfected with wild-type ST3 cDNA. In a second approach, TIMP2 overproduction in MCF7 cells expressing hST3 was induced by retroviral infection. The co-expression of ST3 and TIMP2 failed to enhance the tumorigenicity of MCF7 cells. Notably, matrigel depleted of low-molecular-weight proteins and growth factors failed to promote the tumorigenicity of ST3-expressing MCF7 cells. These findings provide the first in vivo evidence that ST3 is indeed a protease that can modulate cancer progression by remodeling extracellular matrix and probably by inducing it to release the necessary microenvironmental factors. Thus, ST3 represents an interesting target for specific MMP inhibition.