Cell-penetrating peptides (CPPs), including TAT-CPP, have been used to deliver exogenous proteins into living cells. Although a number of proteins fused to TAT-CPP can be delivered into various cells, little is known about the proteolytic cleavage of TAT-fusion proteins in cells. In this study, we demonstrate that a small heat shock protein (sHSP), alphaB-crystallin (αB-crystallin), delivered by TAT-CPP is susceptible to proteolytic cleavage by matrix metalloproteinase-1 (MMP-1) in cardiac myoblast H9c2 cells. Recombinant TAT-αB-crystallin was efficiently transduced into H9c2 cells. For a few hours following protein transduction, generation of a 14-kDa fragment, a cleavage band of TAT-αB-crystallin, increased in a time-dependent manner. This fragment was observed only in detergent-insoluble fractions. Interestingly, treatment with MMP inhibitors blocked the cleavage of TAT-αB-crystallin. In test tubes, recombinant MMP-1 processed TAT-αB-crystallin to generate the major cleavage fragment 14-kDa, as observed in the cells treated with TAT-αB-crystallin. The N-terminal sequences of the 14-kDa fragment were identified as Leu-Arg-Ala-Pro-Ser-Trp-Phe, indicating that this fragment is generated by cleavage at Phe54-Leu55 of αB-crystallin. The MMP-1-selective inhibitor abolished the production of 14-kDa fragments in cells. In addition, the cleaved fragment of TAT-αB-crystallin was significantly reduced in cells transfected with MMP-1 siRNA. Moreover, the enzymatic activity of MMP-1 was markedly increased in TAT-αB-crystallin-treated cells. TAT-αB-crystallin has a cytoprotective effect on H9c2 cells under hypoxic insult, moreover, MMP-1-selective inhibitor treatment led to even increased cell viability. These results suggest that MMP-1 is responsible for proteolytic cleavage of TAT-αB-crystallin during its intracellular transduction in H9c2 cells. J. Cell. Biochem. 112: 2454–2462, 2011. © 2011 Wiley-Liss, Inc.