MT1-MMP exerts its enhanced activity in multiple cancer types. Understanding the activation process of MT1-MMP is essential for designing novel and effective cancer therapies. Like all of the other MMPs, MT1-MMP is synthesized as a zymogen the latency of which is maintained by its inhibitory prodomain. Proteolytic processing of the prodomain transforms the zymogen into a catalytically active enzyme. A sequential, two-step activation process is normally required for MMPs. Our in silico modeling suggests that the prodomain of MT1-MMP exhibits a conserved three helix-bundled structure and a “bait” loop region linking helixes 1 and 2. We hypothesized and then confirmed that in addition to furin cleavage there is also a cleavage at the bait region in the activation process of MT1-MMP. A two-step sequential activation of MT1-MMP is likely to include the MMP-dependent cleavage at either P⁴⁷GDL⁵⁰ or P⁵⁸QSL⁶¹ or at both sites of the bait region. This event results in the activation intermediate. The activation process is then completed by a proprotein convertase cleaving the inhibitory prodomain at the R¹⁰⁸RKR¹¹¹Y¹¹² site, where Y¹¹² is the N-terminal residue of the mature MT1-MMP enzyme. Our findings suggest that the most efficient activation results from a two-step mechanism that eventually is required for the degradation of the inhibitory prodomain and the release of the activated, mature MT1-MMP enzyme. These findings shed more light on the functional role of the inhibitory prodomain and on the proteolytic control of MT1-MMP activation, a crucial process that may be differentially regulated in normal and cancer cells.