In many embryonic tissues, type IIA procollagen is synthesized and deposited into the extracellular matrix containing the NH2-propeptide, the cysteine-rich domain of which binds to bone morphogenic proteins. To investigate whether matrix metalloproteinases (MMPs) synthesized during development and disease can cleave the NH2 terminus of type II procollagens, we tested eight types of enzymes. Recombinant trimeric type IIA collagen NH2-propeptide encoded by exons 1-8 fused to the lectin domain of rat surfactant protein D was used as a substrate. The latter allowed trimerization of the propeptide domain and permitted isolation by saccharide affinity chromatography. Although MMPs 1, 2, and 8 did not show cleavage, MMPs 3, 7, 9, 13, and 14 cleaved the recombinant protein both at the telopeptide region and at the procollagen N-proteinase cleavage site. MMPs 7 and 13 demonstrated other cleavage sites in the type II collagen-specific region of the N-propeptide; MMP-7 had another cleavage site close to the COOH terminus of the cysteine-rich domain. To prove that an MMP can cleave the native type IIA procollagen in situ, we demonstrated that MMP-7 removes the NH2-propeptide from collagen fibrils in the extracellular matrix of fetal cartilage and identified the cleavage products. Because the N-proteinase and telopeptidase cleavage sites are present in both type IIA and type IIB procollagens and the telopeptide cleavage site is retained in the mature collagen fibril, this processing could be important to type IIB procollagen and to mature collagen fibrils as well.