Previous studies from this laboratory have shown that degradation of heparan sulphate proteoglycan by both living macrophages and macrophage lysosomal heparanase induces phenotypic change of vascular smooth muscle cells (SMC) from a high volume fraction of myofilaments (V(v)myo) to a low V(v)myo [Campbell et al. Exp Cell Res 1992; 200: 156-167]. The aim of this study was to determine whether matrix metalloproteinase (MMP) activity is also involved in the induction of SMC phenotypic change by macrophages. A specific inhibitor of MMPs (BB94) was able to block macrophage-induced SMC phenotypic change and subsequent DNA synthesis in freshly dispersed SMC seeded in primary culture at confluent density. The inhibitor did not block these SMC changes when SMC were seeded at low density without macrophages nor did it block heparanase activity directly. We also determined whether heparanase and MMP activities are upregulated together in vivo. Artery homogenates were analysed in a heparanase enzyme assay and for MMPs using zymograms. Increased heparanase activity was observed 3-14 days following balloon catheter injury of rabbit carotid arteries, and returned to control levels 6 weeks after injury. Active MMP2 was induced with heparanase after injury. MMP9 induction was also apparent 6 h after injury. Immunohistology on sections of these arteries showed the presence of MMPI1, 2, 3 and 9 with these MMPs being strongly induced in the intima 7 days after balloon catheter injury. Both heparanase and MMP activities were also present in human end-stage complex lesions from coronary arteries, carotid endarterectomies and abdominal aortic aneurysms. Because MMPs and heparanase are expressed at the same time, it is possible that MMPs facilitate heparanase activity in promotion of phenotypic modulation of SMC in vivo during neointimal thickening following injury and in atherosclerotic lesions.