Rous sarcoma virus-transformed chicken embryo fibroblasts (RSVCEF), when compared to normal CEF, produce elevated levels of matrix metalloproteinase-2 (MMP-2) that exists in a form free of complexed tissue inhibitor of metalloproteinase-2 (TIMP-2). In order to ascertain whether the increased levels of TIMP-free MMP-2 in RSVCEF cultures are due to diminished expression of TIMP-2 or alterations in TIMP-2 that diminish its MMP-2 binding ability, it was necessary to clone, characterize, and express chicken TIMP-2 cDNA. The TIMP-2 cDNA was cloned from a chick embryo lambda gt11 library by RT-PCR using primers based on amino-acid sequences determined from isolated TIMP-2. The deduced amino acid sequence for chicken TIMP-2 is 81% identical to human TIMP-2; most of the sequence differences lie in the carboxyl terminal portion of chicken TIMP-2. Northern analysis of mRNA levels in CEF and RSVCEF demonstrates that TIMP-2 mRNA levels are increased in RSVCEF. However, TIMP-2 protein levels, relative to proMMP-2 levels, appear to decrease upon transformation and suggest additional control of TIMP-2 at the post-transcriptional level. Addition of recombinantly expressed TIMP-2 to RSVCEF cultures causes a disappearance of TIMP-free (TF) proMMP-2 with a corresponding increase in the TIMP-complexed (TC) proMMP-2 levels, demonstrating that TF proMMP-2 is capable of converting to TC pro-MMP-2 when free TIMP-2 is available. Surprisingly, RSVCEF cultures manifest a TIMP-2 population that is not complexed to MMP-2, despite the coexistence of TIMP-free proMMP-2. Gel-filtration analysis indicates that this uncomplexed TIMP-2 exhibits an apparent molecular weight of 50 kDa, indicating it is not free TIMP-2 and that it exists in transformed cultures in a noncovalent complex with an undefined molecule. Thus transformed cells can alter the TIMP-2/MMP-2 balance by transcriptional and post-translational modifications, yielding a population of inhibitor-free, proteolytically active MMP2.