ransforming growth factor beta 1(TGF beta 1), an important regulator of cell behavior, is secreted as a large latent complex (LLC) in which it is bound to its cleaved prodomain (latency-associated peptide [LAP]) and, via LAP, to latent TGF beta-binding proteins (LTBPs). The latter target LLCs to the extracellular matrix (ECM). Bone morphogenetic protein 1 (BMP1) - like metalloproteinases play key roles in ECM formation, by converting precursors into mature functional proteins, and in morphogenetic patterning, by cleaving the antagonist Chordin to activate BMP2/4. We provide in vitro and in vivo evidence that BMP1 cleaves LTBP1 at two specific sites, thus liberating LLC from ECM and resulting in consequent activation of TGF beta 1 via cleavage of LAP by non - BMP1- like proteinases. In mouse embryo. broblasts, LAP cleavage is shown to be predominantly matrix metalloproteinase 2 dependent. TGF beta 1 is a potent inducer of ECM formation and of BMP1 expression. Thus, a role for BMP1- like proteinases in TGF beta 1 activation completes a novel fast-forward loop in vertebrate tissue remodeling.