The metalloproteinase family of proteolytic enzymes can degrade extracellular matrix and facilitate invasive migration. This class of enzymes is specifically inhibited by the tissue inhibitor of metalloproteinases (TIMP-1). Using homologous recombination, we have disrupted the gene encoding TIMP-1 in pluripotent embryonic stem cells. Because the TIMP-1 gene is X linked and is hemizygous in embryonic stem cells, we have been able to study the effect of this mutation in culture. Using a basement membrane invasion assay, we found that the mutant cells, differentiated in low concentrations of serum with retinoic acid, were more invasive than their normal cell counterparts, and that this was specifically reversed by adding exogenous TIMP-1 protein. The invasive cell population had characteristics of an early population of primitive mesenchymal cells, including expression of vimentin and a transient period of invasiveness from 4-8 d after initiation of differentiation. Therefore, metalloproteinase activity can be rate limiting for cell invasion.