We found that the matrix metalloproteinases collagenase (MMP-1) and stromelysin (MMP-3) each has the ability to degrade a novel substrate, serum amyloid A (SAA3). SAA3 is a product of rabbit synovial fibroblasts stimulated with phorbol esters or interleukin-1, and it acts in an autocrine or paracrine manner to induce collagenase in both rabbit and human fibroblasts. Recombinant rabbit fibroblast procollagenase and human fibroblast prostromelysin were produced by baby hamster kidney (BHK) cells stably transfected with these genes, and latent enzyme was activated with aminophenylmercuric acetate (APMA). The Km for both enzymes was approximately 10 microM, and the Vmax for collagenase was approximately 6 pmol/minute/100 ng enzyme, while that for stromelysin was about 3-fold faster. Treatment of SAA3 with either enzyme generated a fragment of approx. 6 kDa that has the same amino terminus as the parent molecule, but this fragment was rapidly degraded. We have been unable to isolate C-terminal fragments, suggesting that the mature protein is cleaved at multiple sites and/or that the initial cleavage fragment is readily digested. The amino acid composition of the 6 kDa fragment suggests that the 14 kDa protein is cleaved at residues 50-57, a hydrophobic region that is conserved between rabbit SAA3 and human SAA1. We conclude that the ability of collagenase and stromelysin to degrade SAA3 broadens the repertoire of substrates for these matrix degrading enzymes, and we speculate that the presence of a feedback mechanism that can subvert the autocrine/paracrine stimulation of matrix-degrading enzymes may play a role in limiting matrix degradation during inflammatory conditions.