A new member of the membrane-type matrix metalloproteinase (MT-MMP) subfamily tentatively named MT5-MMP was isolated from mouse brain cDNA library. It is predicted to contain (i) a candidate signal sequence, (ii) a propeptide region with the highly conserved PRCGVPD sequence, (iii) a potential furin recognition motif RRRRNKR, (iv) a zinc-binding catalytic domain, (v) a hemopexin-like domain, (vi) a 24-residue hydrophobic domain as a potential transmembrane domain, and (vii) a short cytosolic domain. Reverse transcriptase-polymerase chain reaction analysis of its transcripts indicates that MT5-MMP is expressed in a brain-specific manner consistent with the origin of its EST clone from cerebellum. It is also highly expressed during embryonic development at stages day 11 and 15. Like other MT-MMPs, MT5-MMP specifically activates progelatinase A when co-expressed in Madin-Darby canine kidney cells. Its ability to activate progelatinase A is dependent on its proteolytic activity since a mutation converting Glu to Ala in the zinc binding motif HE255LGH renders MT5-MMP inactive against progelatinase A. In contrast to other MT-MMPs, MT5-MMP tends to shed from cell surface as soluble proteinases, thus offering flexibility as both a cell bound and soluble proteinase for extracellular matrix remodeling processes. Taken together, these properties serve to distinguish MT5-MMP as a versatile MT-MMP playing an important role in extracellular matrix remodeling events in the brain and during embryonic development.