Influenza viruses do not encode any proteases and must rely on host proteases for the proteolytic activation of their surface hemagglutinin proteins in order to fuse with the infected host cells. Recent progress in the understanding of human proteases responsible for influenza virus hemagglutinin activation has led to the identification of members of the type II transmembrane serine proteases TMPRSS2 and TMPRSS4 and human airway trypsin-like protease; however, none has proved to be the sole enzyme responsible for hemagglutinin cleavage. In this study, we identify and characterize matriptase as an influenza virus-activating protease capable of supporting multicycle viral replication in the human respiratory epithelium. Using confocal microscopy, we found matriptase to colocalize with hemagglutinin at the apical surface of human epithelial cells and within endosomes, and we showed that the soluble form of the protease was able to specifically cleave hemagglutinins from H1 virus, but not from H2 and H3 viruses, in a broad pH range. We showed that small interfering RNA (siRNA) knockdown of matriptase in human bronchial epithelial cells significantly blocked influenza virus replication in these cells. Lastly, we provide a selective, slow, tight-binding inhibitor of matriptase that significantly reduces viral replication (by 1.5 log) of H1N1 influenza virus, including the 2009 pandemic virus. Our study establishes a three-pronged model for the action of matriptase: activation of incoming viruses in the extracellular space in its shed form, upon viral attachment or exit in its membrane-bound and/or shed forms at the apical surface of epithelial cells, and within endosomes by its membrane-bound form where viral fusion takes place.