Connective tissue damage and angiogenesis are both important features of tumour growth and invasion. Here, we show that endothelial cells maintained on a three-dimensional lattice of intact polymerised collagen formed a monolayer of cells with a cobblestone morphology. When the collagen was exposed to organ culture fluid from human basal cell tumours of the skin (containing a high level of active matrix metalloproteinase-1 (MMP-1)), degradation of the collagen matrix occurred. The major degradation products were the $3over 4$- and $1over 4$-sized fragments known to result from the action of MMP-1 on type I collagen. When endothelial cells were maintained on the partially degraded collagen, the cells organised into a network of vascular tubes. Pretreatment of the organ culture fluid with either tissue inhibitor of metalloproteinase-1 (TIMP-1) or neutralising antibody to MMP-1 prevented degradation of the collagen lattice and concomitantly inhibited endothelial cell organisation into the vascular network. Purified (activated) MMP-1 duplicated the effects of skin organ culture fluid, but other enzymes including MMP-9 (gelatinase B), elastase or trypsin failed to produce measurable fragments from intact collagen and also failed to promote vascular tube formation. Together, these studies suggest that damage to the collagenous matrix is itself an important inducer of new vessel formation.