Amyloid diseases like Alzheimer's disease and familial amyloidosis of Finnish type (FAF) stem from endoproteolytic cleavage of a precursor protein to generate amyloidogenic peptides that accumulate as amyloid deposits in a tissue-specific manner. FAF patients deposit both 8 and 5 kDa peptides derived from mutant (D187Y/N) plasma gelsolin in the extracellular matrix (ECM). The first of two aberrant sequential proteolytic events is executed by furin to yield a 68 kDa (C68) secreted fragment. We now identify the metalloprotease MT1-matrix metalloprotease (MMP), an integral membrane protein active in the ECM, as a protease that processes C68 to the amyloidogenic peptides. We further demonstrate that ECM components are capable of accelerating gelsolin amyloidogenesis. Proteolysis by MT1-MMP-like proteases proximal to the unique chemical environment of the ECM offers an explanation for the tissue-specific deposition observed in FAF and provides critical insight into new therapeutic strategies.