The transition of normally quiescent glomerular MCs (mesangial cells) to a highly proliferative phenotype with characteristics of myofibroblasts is a process commonly observed in inflammatory diseases affecting the renal glomerulus, the ultimate result of which is glomerulosclerosis. Generation of proteolytically active MMP (matrix metalloproteinase)-2 by the membrane-associated membrane type 1 (MT1)-MMP is responsible for the transition of mesangial cells to the myofibroblast phenotype [Turck, Pollock, Lee, Marti and Lovett (1996) J. Biol. Chem. 271 , 15074–15083]. In the present study, we show that the expression of MT1-MMP within the context of MCs is mediated by three discrete cis -acting elements: a proximal non-canonical Sp1 site that preferentially binds Sp1; an overlapping Sp1/Egr-1-binding site that preferentially binds Egr-1; and a more distal binding site for the NFAT (nuclear factor of activated T cells) that binds the NFAT c1 isoform present in MC nuclear extracts. Transfection with an NFAT c1 expression plasmid, or activation of calcineurin with a calcium ionophore, yielded major increases in NFAT c1 nuclear DNA-binding activity, MT1-MMP transcription and protein synthesis, which were additive with the lower levels of transactivation provided by the proximal Sp1 and the overlapping Sp1/Egr-1 sites. Specific binding of NFAT c1 to the MT1-MMP promoter was confirmed by chromatin immunoprecipitation studies, while MT1-MMP expression was suppressed by treatment with the calcineurin inhibitor, cyclosporin A. These studies are the first demonstration that a specific NFAT isoform enhances transcription of an MMP (MT1-MMP) that plays a major role in the proteolytic events that are a dominant feature of acute glomerular inflammation. Suppression of MT1-MMP by commonly used calcineurin inhibitors may play a role in the development of renal fibrosis following renal transplantation.