P2X7 purinoceptor promotes survival or cytotoxicity depending on extracellular adenosine triphosphate (ATP) stimulus intensity controlling its ion channel or P2X7-dependent large pore (LP) functions. Mechanisms governing this operational divergence and functional idiosyncrasy are ill-understood. We have discovered a feedback loop where sustained activation of P2X7 triggers release of active matrix metalloproteinase 2 (MMP-2), which halts ion channel and LP responses via the MMP-2-dependent receptor cleavage. This mechanism operates in cells as diverse as macrophages, dystrophic myoblasts, P2X7-transfected HEK293, and human tumour cells. Given that serum-born MMP-2 activity also blocked receptor functions, P2X7 responses in vivo may decrease in organs with permeable capillaries. Therefore, this mechanism represents an important fine-tuning of P2X7 functions, reliant on both cell-autonomous and extraneous factors. Indeed, it allowed evasion from the ATP-induced cytotoxicity in macrophages and human cancer cells with high P2X7 expression levels. Finally, we demonstrate that P2X7 ablation eliminated gelatinase activity in inflamed dystrophic muscles in vivo. Thus, P2X7 antagonists could be used as an alternative to highly toxic MMP inhibitors in treatments of inflammatory diseases and cancers.