Integrins, matrix metalloproteases (MMPs), and the cytokine TGF-beta have each been implicated in homeostatic cell behaviors such as cell growth and matrix remodeling. TGF-beta exists mainly in a latent state, and a major point of homeostatic control is the activation of TGF-beta. Because the latent domain of TGF-beta1 possesses an integrin binding motif (RGD), integrins have the potential to sequester latent TGF-beta (SLC) to the cell surface where TGF-beta activation could be locally controlled. Here, we show that SLC binds to alpha(v)beta8, an integrin expressed by normal epithelial and neuronal cells in vivo. This binding results in the membrane type 1 (MT1)-MMP-dependent release of active TGF-beta, which leads to autocrine and paracrine effects on cell growth and matrix production. These data elucidate a novel mechanism of cellular homeostasis achieved through the coordination of the activities of members of three major gene families involved in cell-matrix interactions.