The production of collagen-degrading proteases by cultured neonatal rat microglia was examined using an immobilized fibronectin-gelatin matrix coupled to a fluorescent marker and by substrate gel analysis. When microglia were plated onto the surface of the matrix and incubated under resting (nonstimulated) conditions, a small but visible amount of immobilized matrix was degraded. Treatment with lipopolysaccharide (LPS) or interleukin-1 (IL-1) significantly increased the number of microglia demonstrating substrate degradation. Substrate-SDS polyacrylamide gel electrophoresis of samples of supernatants from untreated cultured microglia indicated the presence of a 72 and a 92 kD metalloproteinase with characteristics corresponding to collagenases. Supernatants from untreated astrocyte cultures were shown to have primarily a 72 kD metalloproteinase. Proteinase activity increased on stimulation of the microglia with LPS and IL-1 in a dose-dependent fashion. These results indicate that cultured microglia release active proteases capable of degrading the extracellular matrix in a localized region. The production of proteases by activated microglia may have important physiological and pathophysiological consequences within the restricted extracellular matrix of the CNS.