Hypoxia induces precocious hatching in zebrafish, but we do not have a clear understanding of the molecular mechanisms regulating the activation of the hatching enzyme or how these mechanisms trigger precocious hatching under unfavorable environmental conditions. Using immunohistochemistry, pharmacological inhibition of matrix metalloproteinase 13 (Mmp13), and in vivo zymography, we show that Mmp13a is present in the hatching gland just as embryos become hatching competent and that Mmp13a activity is required for both normal hatching and hypoxia-induced precocious hatching. We conclude that Mmp13a likely functions in activating the hatching enzyme zymogen and that Mmp13a activity is necessary but not sufficient for hatching in zebrafish. This study highlights the broad nature of MMP function in development and provides a non-mammalian example of extra-embryonic processes mediated by MMP activity.