Matrix metalloproteinases (MMPs) are zinc-dependent endopeptidases that degrade the extracellular matrix (ECM) and regulate the extracellular microenvironment. Despite the significant role that MMP activity plays in cell-cell and cell-ECM interactions, migration, and differentiation, analyses of MMPs in vitro and in vivo have relied upon their abundance using conventional immunoassays, rather than their enzymatic activities. To resolve this issue, diverse nanoprobes have emerged and proven useful as effective activity-based detection tools. Here, we review the recent advances in luminescent nanoprobes and their applications in in vitro diagnosis and in vivo imaging of MMP activity. Nanoprobes with the purpose of sensing MMP activity consist of recognition and detection units, which include MMP-specific substrates and luminescent (fluorescent or bioluminescent) nanoparticles, respectively. With further research into improvement of the optical performance, it is anticipated that luminescent nanoprobes will have great potential for the study of the functional roles of proteases in cancer biology and nanomedicine.