Matrix metalloproteinases (MMPs) and, especially membrane type 1 (MT1)-MMP/MMP-14, are promising drug targets in malignancies. In contrast with multiple small-molecule and protein pan-inhibitors of MT1-MMP cleavage activity, the murine 9E8 monoclonal antibody targets the MMP-2-activating function of cellular MT1-MMP alone, rather than the general proteolytic activity and the pro-migratory function of MT1-MMP. Furthermore, the antibody does not interact in any detectable manner with other members of the membrane type (MT)-MMP family. The mechanism of this selectivity remained unknown. Using mutagenesis, binding and activity assays, and modeling in silico, we have demonstrated that the 9E8 antibody recognizes the MT-loop structure, an eight residue insertion that is specific for MT-MMPs and that is distant from the MT1-MMP active site. The binding of the 9E8 antibody to the MT-loop, however, prevents tissue inhibitor of metalloproteinases-2 (TIMP-2) association with MT1-MMP. As a result, the 9E8 antibody incapacitates the TIMP-2-dependent MMP-2-activating function alone rather than the general enzymatic activity of human MT1-MMP. The specific function of the 9E8 antibody we determined directly supports an essential, albeit paradoxical, role of the protein inhibitor (TIMP-2) in MMP-2 activation via a unique membrane-tethered mechanism. In this mechanism, the formation of a tri-molecular MT1-MMPTIMP-2MMP-2 complex is required for both the capture of the soluble MMP-2 proenzyme by cells and then its well-controlled conversion into the mature MMP-2 enzyme. In sum, understanding of the structural requirements for the 9E8 antibody specificity may pave the way for the focused design of the inhibitory antibodies against other individual MMPs.