The disintegrin and metalloproteases (ADAMs) are emerging as therapeutic targets in human disease, but specific drug design is hampered by potential redundancy. Unlike other metzincins, ADAM prodomains remain bound to the mature enzyme to regulate activity. Here ADAM12, a protease that promotes tumor progression and chondrocyte proliferation in osteoarthritic cartilage, is shown to possess a prodomain/catalytic domain cationic molecular switch, regulated by exogenous heparan sulfate and heparin but also endogenous cell surface proteoglycans and the polyanion, calcium pentosan polysulfate. Sheddase functions of ADAM12 are regulated by the switch, as are proteolytic functions in placental tissue and sera of pregnant women. Moreover, human heparanase, an enzyme also linked to tumorigenesis, can promote ADAM12 sheddase activity at the cell surface through cleavage of the inhibitory heparan sulfate. These data present a novel concept that might allow targeting of ADAM12 and suggest that other ADAMs may have specific regulatory activity embedded in their prodomain and catalytic domain structures.