Matrix metalloproteinase 7 (MMP7) is a member of the MMP family. In the small intestine, MMP7 is responsible for activating α-defensins, which are broad-spectrum anti-microbial peptides produced by the Paneth cells. We report that MMP7(-/-) mice are resistant to LPS-induced lethality and that this resistance is correlated with reduced levels of systemic cytokines. LPS induced the upregulation and activation of MMP7 in the small intestine, degranulation of the Paneth cells, and induction of intestinal permeability in MMP7(+/+) mice. In MMP7(-/-) mice, both LPS-induced intestinal permeability and consequent bacterial translocation to the mesenteric lymph nodes were reduced. Based on gene expression analysis and evaluation of intestinal damage, we attribute the protected state of MMP7(-/-) mice to reduced intestinal inflammation. Interestingly, we found that different α-defensins, namely Crp1 (DEFA1) and Crp4 (DEFA4), can stimulate IL-6 release in macrophages and ileum explants in a TLR4 independent way. We conclude that absence of MMP7 protects mice from LPS-induced intestinal permeability and lethality, and suggest that MMP7-activated α-defensins, in addition to their previously recognized bactericidal and anti-inflammatory roles, may exhibit pro-inflammatory activities in the intestine by activating macrophages and amplifying the local inflammatory response in the gut, leading to intestinal leakage and subsequent increase in systemic inflammation.