Hydrocephalus is characterized by abnormal accumulation of cerebrospinal fluid (CSF) in the ventricular cavity. The circulation of CSF in brain ventricles is controlled by the coordinated beating of motile cilia at the surface of ependymal cells (ECs). Here, we show that MT1-MMP is highly expressed in olfactory bulb, rostral migratory stream, and the ventricular system. Mice deficient for membrane-type 1-MMP (MT1-MMP) developed typical phenotypes observed in hydrocephalus, such as dome-shaped skulls, dilated ventricles, corpus callosum agenesis, and astrocyte hypertrophy, during the first 2 weeks of postnatal development. MT1-MMP-deficient mice exhibited reduced and disorganized motile cilia with the impaired maturation of ECs, leading to abnormal CSF flow. Consistent with the defects in motile cilia morphogenesis, the expression of promulticiliogenic genes was significantly decreased, with a concomitant hyperactivation of Notch signaling in the walls of lateral ventricles in Mmp14-/- brains. Inhibition of Notch signaling by γ-secretase inhibitor restored ciliogenesis in Mmp14-/- ECs. Taken together, these data suggest that MT1-MMP is required for ciliogenesis and EC maturation through suppression of Notch signaling during early brain development. Our findings indicate that MT1-MMP is critical for early brain development and loss of MT1-MMP activity gives rise to hydrocephalus.