Newts regenerate lost limbs through a complex process involving dedifferentiation, migration, proliferation, and redifferentiation of cells proximal to the amputation plane. To identify the genes controlling these cellular events, we performed a differential display analysis between regenerating and nonregenerating limbs from the newt Notophthalmus viridescens. This analysis, coupled with a direct cloning approach, identified a previously unknown Notophthalmus collagenase gene (nCol) and three known matrix metalloproteinase (MMP) genes, MMP3/10a, MMP3/10b, and MMP9, all of which are upregulated within hours of limb amputation. MMP3/10b exhibits the highest and most ubiquitous expression and appears to account for the majority of the proteolytic activity in the limb as measured by gel zymography. By testing purified recombinant MMP proteins against potential substrates, we show that nCol is a true collagenase, MMP9 is a gelatinase, MMP3/10a is a stromelysin, and MMP3/10b has an unusually broad substrate profile, acting both as a stromelysin and noncanonical collagenase. Exposure of regenerating limbs to the synthetic MMP inhibitor GM6001 produces either dwarfed, malformed limb regenerates or limb stumps with distal scars. These data suggest that MMPs are required for normal newt limb regeneration and that MMPs function, in part, to prevent scar formation during the regenerative process.