Cells respond to changes in their microenvironment by altering their cell surface and extracellular matrix proteins. Rapid and irreversible changes in these proteins are possible through their degradation or activation by proteolysis. By focalizing the proteolytic events at or near the cell surface, these processes can be effective even in the presence of high concentrations of inhibitors. Evidence is emerging that secreted and transmembrane matrix metalloproteinases, metalloproteinases of the adamalysin and astacin (tolloid) families, and serine proteinases are crucial in development, differentiation, cell motility and invasion, and cell-extracellular decisions.