Matrix metalloproteinase-7 (MMP-7, matrilysin- 1) modulates crucial biological events by processing many epithelial cell surface-associated effectors. We addressed MMP-7 interaction with human epithelial cells and its resulting activity. In human endometrium, a model of controlled tissue remodeling, proMMP-7 was diffusely immunolocalized inside epithelial cells, whereas MMP-7 delineated their entire plasma membrane. Endometrial explants preferentially retained active MMP-7, but not proMMP-7. Endometrial epithelial cells and carcinoma cells from various tissues bound active MMP-7. Endometrial carcinoma-derived Ishikawa cells showed high affinity (K(D) of approximately 2.5 nM) and capacity (approximately 260,000 sites per cell) for MMP-7. MMP-7 binding decreased by extracting membrane sterols or interfering with heparan sulfate proteoglycans, and was abrogated by tissue inhibitors of metalloproteinase-2 (TIMP-2) or synthetic MMP inhibitors. Bound MMP-7 not only remained fully active towards a macromolecular substrate but also became resistant to TIMP-2. We conclude that MMP-7-selective targeting to the plasma membrane of epithelial cells promotes its activity by conferring resistance to TIMP-2.