Since their discovery as pluripotent cytokines extractable from bone matrix, it has been speculated how bone morphogenetic proteins (BMPs) become released and activated from the extracellular matrix (ECM). In contrast to TGF-βs, most investigated BMPs are secreted as bioactive prodomain (PD)-growth factor (GF) complexes (CPLXs). Recently, we demonstrated that PD-dependent targeting of BMP-7 CPLXs to the extracellular fibrillin microfibril (FMF) components fibrillin-1 and -2 represents a BMP sequestration mechanism by rendering the GF latent. Understanding how BMPs become activated from ECM scaffolds such as FMF is crucial to elucidate pathomechanisms characterized by aberrant BMP activation and ECM destruction. Here, we describe a new MMP-dependent BMP-7 activation mechanism from ECM-targeted pools via specific PD degradation. Using Edman sequencing and mutagenesis, we identified a new and conserved MMP-13 cleavage site within the BMP-7 PD. A degradation screen with different BMP family PDs and representative MMP family members suggested utilization of the identified site in a general MMP-driven BMP activation mechanism. Furthermore, sandwich ELISA and solid phase cleavage studies in combination with bioactivity assays, single particle TEM, and in silico molecular docking experiments provided evidence that PD cleavage by MMP-13 leads to BMP-7 CPLX disintegration and bioactive GF release.