The collagenase subfamily of matrix metalloproteinases (MMPs) have important roles in the remodeling of collagenous matrices. The proteinase-activated receptor (PAR) family has a unique mechanism of activation requiring proteolysis of an extracellular domain forming a neo-N terminus that acts as a tethered ligand, a process that has been associated with the development of arthritis. Canonical PAR2 activation typically occurs via a serine proteinase at Arg36-Ser37, but other proteinases can cleave PARs downstream of the tethered ligand and "disarm" the receptor. To identify additional cleavage sites within PAR2, we synthesized a 42-amino-acid peptide corresponding to the extracellular region. We observed that all three soluble MMP collagenases, MMP-1, MMP-8, and MMP-13, cleave PAR2 and discovered a novel cleavage site (Ser37-Leu38). Metalloproteinases from resorbing bovine nasal cartilage and recombinant human collagenases could cleave a quenched fluorescent peptide mimicking the canonical PAR2 activation region, and kinetic constants were determined. In PAR2-overexpressing SW1353 chondrocytes, we demonstrated that the activator peptide SLIGKV-NH2 induces rapid calcium flux, inflammatory gene expression (including MMP1 and MMP13), and the phosphorylation of extracellular signal-regulated kinase (ERK) and p38 kinase. The corresponding MMP cleavage-derived peptide (LIGKVD-NH2) exhibited no canonical activation; however, we observed phosphorylation of ERK, providing evidence of biased agonism. Importantly, we demonstrated that preincubation with active MMP-1 reduced downstream PAR2 activation by a canonical activator, matriptase, but not SLIGKV-NH2 These results support a role for collagenases as proteinases capable of disarming PAR2, revealing a mechanism that suppresses PAR2-mediated inflammatory responses.