Bone matrix serves as a reservoir of growth factors important in growth and tissue remodeling, and transforming growth factor-beta (TGF-beta) is abundant in bone matrix. Normal processes, such as remodeling, and pathological processes, such as osteolytic metastasis, cause the release of growth factors from the matrix, allowing them to influence the behavior of cells within their microenvironment. Breast cancer metastases frequently establish themselves in the bone compartment, often causing localized osteolysis. Stromelysin-3 is a matrix metalloproteinase associated with tumor metastases. Its expression in host tissues favors the homing and survival of malignant epithelial cells in early tumorigenesis by releasing and/or activating growth factors sequestered in the extracellular matrix. Osteoblasts express stromelysin-3, and Northern and Western blot analysis show that its messenger RNA and protein levels are increased by TGF-beta. Nuclear run-off assays demonstrate activation of gene transcription, and experiments using transcription inhibitors demonstrate stabilization of stromelysin-3 messenger RNA by TGF-beta. Importantly, TGFbeta induces stromelysin-3 in fibroblasts by similar mechanisms, indicating that it is likely to stimulate stromelysin-3 expression in breast stroma. Stimulation of stromelysin-3 expression by TGF-beta in fibroblasts and osteoblasts could play a role in the metastasis of breast cancer cells and their homing and survival in bone.