Matrix metalloproteinase-7 (MMP-7) is localized to epithelial cells and is up-regulated in many cancers and in inflammation. We now report that MMP-7 targets a key mesenchymal cell type, the myofibroblast. Recombinant MMP-7 stimulated the proliferation and migration of human colonic myofibroblasts. These responses were partly attributable to activation of other MMPs, notably MMP-3 and MMP-8, and to stimulation of the mitogen-activated protein kinase and phosphatidylinositol 3-kinase signaling pathways. Using a proteomic approach, we identified insulin-like growth factor binding protein-5 (IGFBP-5) as a previously unsuspected target of MMP-7 produced by colonic myofibroblasts. We present evidence that the MMP-7 cleavage of IGFBP-5 liberates IGF-II that functions as an autocrine myofibroblast growth factor. Thus, MMP-7 may act as a signal from epithelial cells for local recruitment of myofibroblasts and stimulation of their proliferation. Similar effects of MMP-7 produced in epithelial tumors might account for the expansion of stroma through activation of myofibroblasts.