Activatable cell-penetrating peptides (ACPPs) are known to be able to decrease the cytotoxicity of cell-penetrating peptide (CPP)-based drug delivery systems. Furthermore, they can improve the targeting of CPPs when specifically recognized and hydrolyzed by characteristic proteases. A comprehensive and profound understanding of the recognition and hydrolysis process will provide a better design of the ACPP-based drug delivery system. Previous studies have clearly described how ACPPs are recognized and bound by MMPs. However, the hydrolysis mechanism of ACPPs is still unsolved. This work focuses on a proteinase-sensitive cleavable linker of ACPPs (PLGLAG), the key structure for recognition and hydrolysis, trying to determine the mechanism by which MMP-9 hydrolyzes its substrate PLGLAG. The quantum mechanics/molecular mechanics (QM/MM) calculations herein show that MMP-9 proteolysis is a water-mediated four-step reaction. More specifically, it consists of (i) nucleophilic attack, (ii) hydrogen-bond rearrangement, (iii) proton transfer, and finally (iv) amide bond rupture. Considering the reversibility of multistep reaction, the second step (i.e., hydrogen-bond rearrangement) has the highest barrier and is the rate-limiting step in the hydrolysis of PLGLAG. The possible design and improvement of the key P1 and P1' sites are also explored through mutations. The present results indicate that, while the mutations affect the reaction energy barriers and the rate-limiting steps, all mutants considered could be hydrolyzed by MMP-9. To provide further insights, the hydrolysis mechanism of MMP-2, which has a similar hydrolysis process to that of MMP-9 but with different reaction barriers, is also studied and compared. As a result, this work provides detailed insights into the hydrolysis mechanism of ACPPs by MMP-9 and, thus, also possible insights for the development of new strategies for ACPP-based delivery systems.