Tissue transglutaminase 2 (TG2) is overexpressed in epithelial ovarian cancer (EOC) and promotes intraperitoneal metastasis. How TG2 facilitates the spread of EOC is unknown. Here, we show that TG2 regulates the expression and function of matrix metalloproteinase-2 (MMP-2), a critical mediator of tissue invasiveness. TG2 knockdown down-regulates MMP-2 protein and mRNA expression in SKOV3, IGROV-1, MDA-MB-436, and PC-3 cancer cells. TG2 knockdown or inhibition of TG2 activity using KCC009 decreases MMP-2 gelatinase activity in cancer cells. MMP-2 expression and function are regulated by TG2 at transcriptional level, as demonstrated by quantitative PCR and reporter assays. We used bioinformatics and chromatin immunoprecipitation to identify a CREB binding site in the MMP-2 promoter. Binding of CREB to the MMP-2 promoter was diminished in cells that expressed decreased TG2 levels. TG2 knockdown decreased CREB phosphorylation, and CREB knockdown decreased MMP-2 expression. The effect of TG2 on CREB activity and MMP-2 transcription is mediated by TG2-dependent degradation of protein phosphatase 2 (PP2A-alpha). We show that PP2A-alpha complexes with and is targeted for degradation by TG2. In addition to their related in vitro expression levels, TG2 and MMP-2 expression were significantly correlated in vivo, as shown by concordant immunostaining in peritoneal xenografts and in human ovarian tumors. The capacity of TG2 to regulate MMP-2 expression in vitro and in vivo identifies a mechanism that may facilitate tissue invasion and the spread of EOC. The demonstration that TG2 induced degradation of PP2A-alpha activates CREB, and thereby increases MMP-2 transcription, provides novel mechanistic insight into the pro- metastatic function of TG2.