To elucidate the mechanism of synovial damage in rheumatoid arthritis, we studied the activation of latent collagenases released from adherent rheumatoid synovial cells in culture. Latent enzyme was not complexed with α₂ macroglobulin, the principal proteinase inhibitor in serum, and could be activated by trypsin in the presence of α₂, macroglobulin if sufficient proteinase was added to saturate inhibitor. Latent collagenase bound half as effectively to collagen fibrils as active enzyme. Plasmin was a threefold better activator of latent enzyme than trypsin and could be generated by addition of plasminogen to synovial-cell cultures. Production of both collagenase and plasminogen activator was inhibited by dexamethasone (10^–9 M). These studies emphasize the importance of control of activation in regulating collagenase activity. It is likely that rheumatoid synovium produces both latent collagenase and plasminogen activator; plasmin is activated from its zymogen, plasminogen, present in inflamed tissues, and in turn activates collagenase. (N Engl J Med 296:1017–1023, 1977)