Membrane type 4 matrix metalloproteinase (MT4‐MMP) [matrix metalloproteinase (MMP) 17] is a GPI‐anchored membrane‐type MMP expressed on the cell surface of human breast cancer cells. In triple‐negative breast cancer cells, MT4‐MMP promotes primary tumour growth and lung metastases. Although the trafficking and internalization of the transmembrane membrane type 1 MMP have been extensively investigated, little is known about the regulatory mechanisms of the GPI‐anchored MT4‐MMP. Here, we investigated the fate and cellular trafficking of MT4‐MMP by analysing its homophilic complex interactions, internalization and recycling dynamics as compared with an inert form, MT4‐MMP‐E249A. Oligomeric and dimeric complexes were analysed by cotransfection of cells with FLAG‐tagged or Myc‐tagged MT4‐MMP in reducing and nonreducing immunoblotting and coimmunoprecipitation experiments. The trafficking of MT4‐MMP was studied with an antibody feeding assay and confocal microscopy analysis or cell surface protein biotinylation and western blot analysis. We demonstrate that MT4‐MMP forms homophilic complexes at the cell surface, and internalizes in early endosomes, and that some of the enzyme is either autodegraded or recycled to the cell surface. Our data indicate that MT4‐MMP is internalized by the clathrin‐independent carriers/GPI‐enriched early endosomal compartments pathway, a mechanism that differs from that responsible for the internalization of other membrane‐type MMP members. Although MT4‐MMP localizes with caveolin‐1, MT4‐MMP internalization was not affected by inhibitors of caveolin‐1 or clathrin endocytosis pathways, but was reduced by CDC42 or RhoA silencing with small interfering RNA. We provide a new mechanistic insight into the regulatory mechanisms of MT4‐MMP, which may have implications for the design of novel therapeutic strategies for metastatic breast cancer.