MT1-MMP (membrane type 1 matrix metalloproteinase, or MMP-14) is a key enzyme in molecular carcinogenesis, tumour-cell growth, invasion and angiogenesis. Novel and potent MMP inhibitors with a mercaptosulphide zinc-binding functionality have been designed and synthesized, and tested against human MT1-MMP and other MMPs. Binding to the MT1-MMP active site was verified by the competitive-inhibition mechanism and stereochemical requirements. MT1-MMP preferred deep P1′ substituents, such as homophenylalanine instead of phenylalanine. Novel inhibitors with a non-prime phthalimido substituent had Ki values in the low-nanomolar range; the most potent of these inhibitors was tested and found to be stable against air-oxidation in calf serum for at least 2 days. To illustrate the molecular interactions of the inhibitor-enzyme complex, theoretical docking of the inhibitors into the active site of MT1-MMP and molecular minimization of the complex were performed. In addition to maintaining the substrate-specificity pocket (S1′ site) van der Waals interactions, the P1′ position side chain may be critical for the peptide-backbone hydrogen-bonding network. To test the inhibition of cell-mediated substrate cleavage, two human cancer-cell culture models were used. Two of the most potent inhibitors tested reached the target enzyme and effectively inhibited activation of proMMP-2 by endogenous MT1-MMP produced by HT1080 human fibrosarcoma cells, and blocked fibronectin degradation by prostate cancer LNCaP cells stably transfected with MT1-MMP. These results provide a model for mercaptosulphide inhibitor binding to MT1-MMP that may aid in the design of more potent and selective inhibitors for MT1-MMP. © 2005 Biochemical Society.