Matrix metalloproteinases (MMPs) and their tissue inhibitors (TIMPs) have roles in physiological and pathological processes. We evaluated immunohistochemical expression of MMP-2 and TIMP-2 in paraffin sections of 12 human fetal thyroids at mid-term gestation and 79 thyroid tumors of follicular origin. Besides evaluating expression of these proteins during fetal development and neoplastic transformation, we determined whether expression of MMP-2 and TIMP-2 may help to differentiate papillary thyroid carcinoma (PTC) from follicular thyroid adenoma (FTA) and/or peritumoral tissue (PT). We also investigated their relationship with prognostically important clinicopathological parameters of PTC. Immunoreactive MMP-2 and TIMP-2 were found in all fetal thyroid tissues examined. Tumor tissues contained variable amounts of MMP-2 and TIMP-2, with overexpression of these proteins in PTC compared to FTA and PT tissue. According to the statistical analysis, MMP-2 distinguished follicular variant of PTC from FTA and overall PTC from total nonmalignant lesions. In PTC, high MMP-2 expression correlated with lymph node metastasis (P=0.022), while high TIMP-2 expression was positively correlated with tumor size (P=0.049) and extrathyroid invasion (P=0.017). Overall, these results indicate a role for MMP-2 and TIMP-2 in both thyroid development and malignant transformation and suggest that positive immunohistochemistry for MMP-2 and TIMP-2 might support diagnosis of PTC and predict unfavorable biological behavior.