Cell invasion requires cooperation between adhesion receptors and matrix metalloproteinases (MMPs). Membrane type (MT)-MMPs have been thought to be primarily involved in the breakdown of the extracellular matrix. Our report presents evidence that MT-MMPs in addition to the breakdown of the extracellular matrix may be engaged in proteolysis of adhesion receptors on tumor cell surfaces. Overexpression of MT1-MMP by glioma and fibrosarcoma cells led to proteolytic degradation of cell surface tissue transglutaminase (tTG) at the leading edge of motile cancer cells. In agreement, structurally related MT1-MMP, MT2-MMP, and MT3-MMP but not evolutionary distant MT4-MMP efficiently degraded purified tTG in vitro. Because cell surface tTG represents a ubiquitously expressed, potent integrin-binding adhesion coreceptor involved in the binding of cells to fibronectin (Fn), the proteolytic degradation of tTG by MT1-MMP specifically suppressed cell adhesion and migration on Fn. Reciprocally, Fn in vitro and in cultured cells protected its surface receptor, tTG, from proteolysis by MT1-MMP, thereby supporting cell adhesion and locomotion. In contrast, the proteolytic degradation of tTG stimulated migration of cells on collagen matrices. Together, our observations suggest both an important coreceptor role for cell surface tTG and a novel regulatory function of membrane-anchored MMPs in cancer cell adhesion and locomotion. Proteolysis of adhesion proteins colocalized with MT-MMPs at discrete regions on the surface of migrating tumor cells might be controlled by composition of the surrounding ECM.