The modulation of the production of collagenase by an epithelial cell line derived from a spontaneously arising rat mammary carcinoma has been studied. The cell line, BC1, was grown permanently under defined serum-free conditions, thus avoiding the poorly characterized and variable effects of serum on collagenase production. Piperazine-N,N'-bis-(2-ethanesulfonic acid) (Pipes), retinoic acid and cytochalasin B all stimulated collagenase secretion, while dexamethasone inhibited it and progesterone, prolactin, prostaglandin E2, and estrogen had no effect. This profile of response to exogenous compounds was distinct from that of cells of mesenchymal origin and from human keratinocytes. For the production of large quantities of collagenase, culture medium was supplemented with Pipes (30 mM, pH 6.8), and retinoic acid (1 microM, on alternate feeds). The collagenase secreted by BC1 cells grown under these conditions was latent and had a molecular mass of 59 kDa. Treatment of the 59 kDa form with trypsin or APMA caused a progressive decrease in molecular mass via 54 kDa and 52 kDa intermediates, to a 48 kDa form. This form was purified to electrophoretic homogeneity by heparin-Sepharose, zinc-chelate-Sepharose, and Sephacryl S-200 chromatography. Five milligrams of purified collagenase were recovered per litre of culture medium.