MT4-MMP (MMP17) belongs to a unique subset of membrane type-matrix metalloproteinases that are anchored to the cell surface via a glycosylphosphatidylinositol moiety. However, little is known about its biochemical properties. Here, we report that MT4-MMP is displayed on the cell surface as a mixed population of monomeric, dimeric, and oligomeric forms. Sucrose gradient fractionation demonstrated that these forms of MT4-MMP are all present in lipid rafts. Mutational and computational analyses revealed that Cys(564), which is present within the stem region, mediates MT4-MMP homodimerization by forming a disulfide bond. Substitution of Cys(564) results in a more rapid MT4-MMP turnover, when compared with the wild-type enzyme, consistent with a role for dimerization in protein stability. Expression of MT4-MMP in Madin-Darby canine kidney cells enhanced cell migration and invasion of Matrigel, a process that requires catalytic activity. However, a serine substitution at Cys(564) did not reduce MT4-MMP-stimulated cell invasion of Matrigel suggesting that homodimerization is not required for this process. Deglycosylation studies showed that MT4-MMP is modified by N-glycosylation. Moreover, inhibition of N-glycosylation by tunicamycin diminished the extent of MT4-MMP dimerization suggesting that N-glycans may confer stability to the dimeric form. Taken together, the data presented here provide a new insight into the characteristics of MT4-MMP and highlight the common and distinct properties of the glycosylphosphatidylinositol-anchored membrane type-matrix metalloproteinases.