In acute and chronic lung disease, widespread disruption of tissue architecture underlies compromised pulmonary function. Pulmonary fibroblasts have been implicated as critical effectors of tissue-destructive extracellular matrix (ECM) remodeling by mobilizing a spectrum of proteolytic enzymes. Although efforts to date have focused on the catabolism of type I collagen, the predominant component of the lung interstitial matrix, the key collagenolytic enzymes employed by pulmonary fibroblasts remain unidentified. Herein, membrane type-1 matrix metalloprotease (MT1-MMP) is identified as the dominant and direct-acting protease responsible for the type I collagenolytic activity mediated by both mouse and human pulmonary fibroblasts. Furthermore, MT1-MMP is shown to be essential for pulmonary fibroblast migration within three-dimensional (3-D) hydrogels of cross-linked type I collagen that recapitulate ECM barriers encountered in the in vivo environment. Together, these findings demonstrate that MT1-MMP serves as a key effector of type I collagenolytic activity in pulmonary fibroblasts and earmark this pericellular collagenase as a potential target for therapeutic intervention.