Angiostatin is one of the most potent inhibitors of angiogenesis. Reports have shown that metalloelastase, pancreas elastase, plasmin reductase, and plasmin convert plasminogen to angiostatin. However, the cleavage sites of plasminogen by those enzymes have not been determined. Here we demonstrate that two members of the human matrix metalloproteinase (MMP) family, matrilysin (MMP-7) and gelatinase B/type IV collagenase (MMP-9), hydrolyze human plasminogen to generate angiostatin fragments. The cleavage sites have been determined. The 58-kDa bands derived from plasminogen by MMP-7 and MMP-9 both have the N-terminal sequence KVYLSEXKTG, which corresponds to that of angiostatin. This N terminus is identical to that of the starting plasminogen itself and corresponds to residues 97-106 of prepro-plasminogen. The 42- and 38-kDa bands generated by MMP-7 both have the N-terminal sequence VVLLPNVETP, which corresponds to the amino acid sequence 467-476 of prepro-plasminogen, between kringle domain 4 and 5. MMP-9 cleaves plasminogen to generate a 42-kDa fragment with the N-terminal sequence PVVLLPNVE, 1 residue upstream of the MMP-7 cleavage site. These results indicate that MMP-7 and MMP-9 may regulate new blood vessel formation by cleaving plasminogen and generating angiostatin molecules.