The latent precursor of matrilysin (EC 3.4.24.23; punctuated metalloproteinase (PUMP) was purified from transfected mouse myeloma cell conditioned medium and was found to contain one zinc atom per molecule which was essential for catalytic activity. Promatrilysin could be activated to the same specific activity by (4-aminophenyl)mercuric acetate, trypsin, and incubation at elevated temperatures (heat activation). Active matrilysin hydrolyzed the fluorescent substrate 2,4-dinitrophenyl-Pro-Leu-Gly-Leu-Trp-Ala-D-Arg-NH2 at the Gly-Leu bond with a maximum value for kcat/Km of 1.3 x 10(4) M-1 s-1 at the pH optimum of 6.5 and pKa values of 4.60 and 8.65. Activity is inhibited by the tissue inhibitor of metalloproteinases-1 in a 1:1 stoichiometric interaction. Analysis by sodium dodecyl sulfate polyacrylamide gel electrophoresis in conjunction with N-terminal sequencing revealed that, as with all other matrix metalloproteinases similarly studied, promatrilysin activation was accompanied by the stepwise proteolytic removal of an M(r) 9000 propeptide from the N-terminus. The intermediates generated were dependent on the mode of activation used but, in all cases studied, activation terminated with an autocatalytic cleavage at E77-Y78 to yield the final M(r) 19,000 active matrilysin. From an analysis of the stability of the various intermediates, we propose that the sequence L13-K33 is particularly important in protecting the E77-Y78 site from autocatalytic cleavage, thereby maintaining the latency of the proenzyme.