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.