Cell migration and proteolysis are two essential processes during tumor invasion and metastasis. Matrix metalloproteinase (MMP)-2 (type IV collagenase; gelatinase A), is implicated in tumor metastasis as well as in primary tumor growth. The Rho family of small GTPases regulates the dynamics of actin cytoskeleton associated with cell motility. In this report, we provide evidence that Rac1, one member of Rho-related small GTPases, is a mediator of MMP-2 activation in HT1080 fibrosarcoma cells cultured in three-dimensional collagen gel (3D-col) and that MMP-2 activation is required for Rac1-promoted cell invasion through collagen barrier. Stable expression of dominant negative (Rac1V12N17) and constitutively active Rac1 (Rac1V12), respectively, in HT1080 cells demonstrates that Rac1 promoted cell invasiveness across type I collagen and collagen-dependent MMP-2 activation. Active Rac1 is sufficient to induce MMP-2 activation in cells cultured in fibrin gel, an extracellular matrix component that does not support MMP-2 activation. The Rac1-dependent MMP-2 activation occurred in a cell-associated fashion and required MMP activities. Because the cell membrane-mediated MMP-2 activation requires MT1-MMP and low amount of issue inhibitor of matrix metalloproteinase-2 (TIMP-2), their expression was examined. Rac1 modulated MT1-MMP mRNA level and the accumulation of a 43-kDa form of MT1-MMP protein, in correlation with MMP-2 activation profile. However, TIMP-2 expression was independent of Rac1 activity. The coordinate modulation of MMP-2 activity and MT1-MMP expression/processing by Rac1 is consistent with cell collagenolytic activity. The C-terminal hemopexin-like domain of MMP-2, which interferes with the cell membrane activation of MMP-2, reduced Rac1-promoted cell invasiveness as monitored by collagen invasion assay. These results suggest that collagen-dependent MMP-2 activation and MT1-MMP expression/processing contribute to Rac-promoted tumor cell invasion through interstitial collagen barrier.