Embryo implantation and trophoblast invasion are tightly regulated processes, involving sophisticated communication between maternal decidual and fetal trophoblast cells. Decidualization is a prerequisite for successful implantation and is promoted by a number of paracrine agents, including activin A. To understand the downstream mechanisms of activin-promoted decidualization, the effects of activin on matrix metalloproteinases (MMPs) (important mediators of decidualization) were investigated. Activin A stimulated endometrial production of proMMPs-2, -3, -7, -9, and active MMP-2. In contrast, inhibin A was a potent inhibitor of proMMP-2, and antagonized the effect of activin on MMPs. Activin is up-regulated with decidualization, and MMPs-2, -3, and -9 increase in parallel. Furthermore, proMMP-2 production is stimulated when decidualization is accelerated with activin, and suppressed when activin is neutralized, attenuating decidualization. These data support that activin A promotes decidualization through up-regulating MMPs. Previous in vitro evidence proposes further roles for activin and MMPs in promoting trophoblast invasion; therefore, we examined their interrelationships in early human implantation sites. MMPs-7 and -9 were produced by static cytotrophoblast subpopulations, whereas MMP-2 was strikingly up-regulated in invasive extravillous cytotrophoblasts (EVT). Maternal decidua is the primary source of activin, where a role in stimulating MMP-2 in iEVTs can be envisaged. Inhibin was absent from cytotrophoblast populations, except for a dramatic up-regulation in endovascular EVT plugs, coinciding with a down-regulation of MMP-2. This suggests that inhibin may have a role in the cessation of vascular invasion. These data support that activin, via effects on MMPs, is an important factor in the maternal-fetal dialog regulating implantation. Copyright © 2006 by The Endocrine Society.