Secreted metalloproteases initiating proteolytic degradation of collagens and proteoglycans play a critical role in remodeling of the connective tissue. Activation of the secreted proenzymes and interaction with their specific inhibitors TIMP and TIMP-2 are responsible for regulation of enzyme activity in extracellular space. We have previously demonstrated that 92- and 72-kDa Type IV procollagenases, in contrast to interstitial collagenase (ClI), form specific complexes with TIMP and the related inhibitor TIMP-2, respectively. The physiologic significance of the proenzyme-inhibitor complex and the mechanism of activation of Type IV collagenases remained unclear. Here, we demonstrate that in the absence of TIMP, 92-kDa Type IV procollagenase (92T4Cl) can form a covalent homodimer and a novel complex with ClI. In the presence of TIMP, the formation of a 92T4Cl proenzyme complex with TIMP prevents dimerization, formation of the complex with ClI, and activation of the 92T4Cl proenzyme by stromelysin, a related metalloprotease. The proenzyme homodimer is unable to form a complex with TIMP. All TIMP-free forms of the proenzyme can be activated by stromelysin. The 92T4Cl-ClI complex can be activated to yield a complex active against both gelatin and fibrillar Type I collagen, suggesting a mechanism for cooperative action of two enzymes in reducing collagen fibrils to small peptides under physiologic conditions.