We demonstrate that the presentation of LRP and the subsequent uptake of its ligands by malignant cells are both strongly regulated by MT1-MMP. Because LRP is essential for the clearance of multiple ligands, these findings have important implications for many pathophysiological processes including the pericellular proteolysis in neoplastic cells as well as the fate of the soluble matrix-degrading proteases such as MMP-2. MT1-MMP is a key protease in cell invasion and a physiological activator of MMP-2. Cellular LRP consists of a non-covalently associated 515-kDa extracellular alpha-chain (LRP-515) and an 85-kDa membrane-spanning beta-chain, and plays a dual role as a multifunctional endocytic receptor and a signaling molecule. Through the capture and uptake of several soluble proteases, LRP is involved in the regulation of matrix proteolysis. LRP-515 associates with the MT1-MMP catalytic domain and is highly susceptible to MT1-MMP proteolysis in vitro. Similar to MT1-MMP, the metalloproteinases MT2-MMP, MT3-MMP and MT4-MMP also degrade LRP. The N-terminal and C-terminal parts of the LRP-515 subunit are resistant and susceptible, respectively, to MT1-MMP proteolysis. In cells co-expressing LRP and MT1-MMP, the proteolytically competent protease decreases the levels of cellular LRP and releases its N-terminal portion in the extracellular milieu while the catalytically inert protease co-precipitates with LRP. These events implicate MT1-MMP, not only in the activation of MMP-2, but also in the mechanisms that control the subsequent fate of MMP-2 in cells and tissues.