Matrix metalloproteinases (MMPs) are extracellular proteases that can cleave extracellular matrix and alter signaling pathways. They have been implicated in many disease states, but it has been difficult to understand the contribution of individual MMPs, as there are over 20 MMPs in vertebrates. The vertebrate MMPs have overlapping substrates, they exhibit genetic redundancy and compensation, and pharmacological inhibitors are non-specific. In contrast, there are only two MMP genes in Drosophila, DmMmp1 and DmMmp2, which makes Drosophila an attractive system to analyze the basis of MMP specificity. Previously, Drosophila MMPs have been categorized by their pericellular localization, as Mmp1 appeared to be secreted and Mmp2 appeared to be membrane-anchored, suggesting that protein localization was the critical distinction in this small MMP family. We report here that products of both genes are found at the cell surface and released into media. Additionally, we show that products of both genes contain GPI-anchors, and unexpectedly, that GPI-anchored MMPs promote cell adhesion when they are rendered inactive. Finally, by using new reagents and assays, we show that the two MMPs cleave different substrates, suggesting that this is the important distinction within this smallest MMP family.