Membrane type-1 matrix metalloproteinase (MT1-MMP) is a zinc-binding endopeptidase, which plays a crucial role in tumour growth, invasion and metastasis. We have shown previously that MT1-MMP has higher expression levels in the human urothelial cell carcinoma (UCC) tissue. We show here that siRNA against MT1-MMP blocks invasion in UCC cell lines. Invasion is also blocked by broad-spectrum protease and MMP inhibitors including tissue inhibitor of metalloproteinase-1 and -2. Membrane type-1-MMP can also regulate transcription. We have used expression arrays to identify genes that are differentially transcribed when siRNA is used to suppress MT1-MMP expression. Upon MT1-MMP knockdown, Dickkopf-3 (DKK3) expression was highly upregulated. The stability of DKK3 mRNA was unaffected under these conditions, suggesting transcriptional regulation of DKK3 by MT1-MMP. Dickkopf-3 has been previously shown to inhibit invasion. We confirm that the overexpression of DKK3 leads to decreased invasive potential as well as delayed wound healing. We show for the first time that the effects of MT1-MMP on cell invasion are mediated in part through changes in DKK3 gene transcription.