We designed and synthesized a novel contrast agent (CA) to image the activity of matrix metalloproteinase-2 (MMP-2) in a tumor, noninvasively using magnetic resonance imaging (MRI). We exploited the concept of solubility-switchable CAs in the design of a protease-modulated CA (PCA), referred to as PCA2-switch. This PCA contains a paramagnetic gadolinium chelate (Gd-DOTA), which was attached to the N-terminus of a MMP-2 cleavable peptide sequence via a hydrophobic chain. The aqueous solubility of the CA depends on the presence of a polyethylene glycol chain (PEG) on the C-terminus of the peptide. Upon proteolytic cleavage of the peptide by MMP-2, the PEG chain is detached from the CA, which becomes less water soluble. This compound and control compounds were successfully tested in an animal model bearing two tumors with different levels of MMP-2 activity.