Matrix metalloproteinase-3 (MMP-3, or stromelysin-1) specifically hydrolyzes the Glu143-Leu144 peptide bond in 45-kDa single-chain urokinase-type plasminogen activator (scu-PA) and in its two-chain (tcu-PA) derivative, yielding a 17-kDa NH2-terminal domain comprising the u-PA receptor (u-PAR) binding site and a 32-kDa COOH-terminal moiety containing the serine proteinase domain of u-PA. The conversion is completely abolished in the presence of the MMP inhibitors EDTA or 1,10-phenanthroline. Biospecific interaction analysis indicates that binding of MMP-3 occurs through the 32-kDa fragment. The 32-kDa fragment derived from scu-PA (scu-PA-32k) has a specific activity of </=500 IU/mg, but it can be activated with plasmin to a two-chain derivative (tcu-PA-32k) with a specific activity of 79 000 IU/mg. tcu-PA and tcu-PA-32k moieties derived from scu-PA-32k by plasmin or from tcu-PA by MMP-3 have comparable amidolytic activities toward the chromogenic substrate S-2444 (kcat/Km of 110 and 160 mM-1 s-1, respectively) and similar plasminogen activating activities in a coupled chromogenic substrate assay. Specific binding of the 17-kDa NH2-terminal domain to THP-1 monocytoid cells is completely abolished by competition with scu-PA but is not affected by scu-PA-32k (residual binding of 88 +/- 9% (mean +/- SEM; n = 3) with 25-fold molar excess). Thus, MMP-3 removes a functional NH2-terminal u-PAR-binding domain from u-PA without affecting its enzymatic properties.