Purpose. To determine the serum levels of sex steroids and tear matrix metalloproteinases (MMP) 2 and 9 concentrations in postmenopausal women with dry eye. Methods. Forty-four postmenopausal women with dry eye and 22 asymptomatic controls were enrolled. Blood was drawn and analyzed for serum levels of sex steroids and lipids. Then, the following tests were performed: tear collection, Ocular Surface Disease Index (OSDI) questionnaire, fluorescein tear film break-up time (TBUT), corneal fluorescein staining, Schirmer test, and conjunctival impression cytology. The conjunctival mRNA expression and tear concentrations of MMP-2 and MMP-9 were measured. Results. Serum 17β-estradiol levels were significantly higher in the dry eye subjects than in the controls (P = 0.03), whereas there were no significant differences in levels of testosterone, dehydroepiandrosterone sulfate (DHEA-S), and progesterone. Tear MMP-2 and MMP-9 concentrations (P < 0.001), as well as the MMP-9 mRNA expression in conjunctival samples (P = 0.02), were significantly higher in dry eye subjects than in controls. Serum 17β-estradiol levels were positively correlated with tear MMP-2 and MMP-9 concentrations and negatively correlated with Schirmer test values. Conclusions. High levels of 17β-estradiol are associated with increased matrix metalloproteinase-2 and metalloproteinase-9 activity in tears of postmenopausal women with dry eye.