Temporal lobe epilepsy is frequently associated with granule cell dispersion (GCD), an abnormal widening of the granule cell layer in the dentate gyrus. There is increasing evidence that a loss and the functional inactivation of the positional signal Reelin is involved in GCD formation. Reelin is synthesized and released by Cajal-Retzius cells and interneurons, and its function depends on proteolytic cleavage after secretion. Epileptic conditions impair Reelin processing by inhibition of matrix metalloprotease (MMP) activity and cause the extracellular accumulation of unprocessed Reelin. Here we investigated how epileptic conditions inhibit MMP activity. We used kainate (KA) treatment of organotypic hippocampal slice cultures as an epilepsy model and found a significant increase of tissue inhibitor of metalloproteases 1 (TIMP-1) levels and strongly enhanced TIMP-1 immunolabeling in hippocampal neurons. Functional inhibition of TIMP-1 prevented the KA-induced impairment of Reelin cleavage indicating that TIMP-1 inhibits MMP activity. Moreover, application of recombinant TIMP-1 alone was sufficient to impair Reelin processing and to induce GCD, similar to that observed after KA treatment. In summary, we present evidence that epileptic conditions inhibit MMP activity by up-regulation of endogenous TIMP-1, which in turn leads to extracellular accumulation of uncleaved and inactive Reelin and thereby to GCD.