Human progelatinase B was activated by collagenase-3 in a time-dependent fashion. Activation proceeded through an intermediate form of Mr 86,000 to the final active form of Mr 82,000. N-terminal amino acid sequence determination demonstrated that the Glu40-Met41 peptide bond was initially hydrolysed followed by cleavage of the Arg87-Phe88 peptide bond releasing the rest of the propeptide domain which was accompanied by the achievement of maximal enzymatic activity as revealed using a quenched fluorescent substrate. Kinetic analysis of activation revealed that the rates were dependent on the concentration of the proenzyme as well as active collagenase-3. Active gelatinase B did not contribute to the activation rate of the proenzyme initiated by collagenase-3 and our results indicate that progelatinase B activation proceeds via bimolecular cleavage with collagenase-3 involving sequential cleavage of the propeptide in two steps. The activation rates were not dependent on C-terminal domain interactions between progelatinase B and collagenase-3, as assessed using wild-type and C-terminal deletion mutants of both enzymes. Since elevated levels of both gelatinase B and collagenase-3 have been observed in arthritis and breast cancer pathology these enzymes may well form a proteolytic cascade in these diseases which allows rapid turnover of the extracellular matrix.