Sequence analysis of the Xestia c-nigrum granulovirus (XcGV) genome identified an open reading frame encoding a 469-amino-acid (54-kDa) protein with over 30% amino acid sequence identity to a region of about 150 amino acids that includes the catalytic domains of human stromelysin 1 (Str1)/matrix metalloproteinase 3 (MMP-3) (EC 3.4.24.17) and sea urchin hatching enzyme (HE). Stromelysin homologs have not been reported from baculoviruses or other viruses. Unlike human Str1 and sea urchin HE, the putative XcGV-MMP does not have a signal peptide and lacks the peptide motif involved in the cysteine switch that maintains other MMPs in an inactive form. The putative XcGV-MMP, however, possesses a conserved zinc-binding motif in its putative catalytic domain. The XcGV-MMP homolog was cloned, and a recombinant Bombyx mori nucleopolyhedrovirus (BmNPV) that expresses XcGV-MMP under the polyhedrin promoter was constructed. A distinct pattern of melanization was observed in B. mori larvae infected with MMP-expressing BmNPV. Fat body extracts from larvae overexpressing the 54-kDa recombinant MMP digested dye-impregnated collagen (Azocoll). The enzymatic activity was inhibited by two metalloproteinase inhibitors, EDTA and 1,10-phenanthroline. These results suggest that the XcGV MMP-3 gene homolog encodes a functional metalloproteinase.