Discoidin domain receptor 2 (DDR2) is a tyrosine kinase receptor expressed in mesenchymal tissues, the ligand of which is fibrillar collagen. We have compared DDR2 signaling in skin fibroblasts derived from DDR2(-/-) and DDR2(+/-) mice. Proliferation of DDR2(-/-) fibroblasts was significantly decreased compared with DDR2(+/-) cells. DDR2(-/-) fibroblasts exhibited markedly impaired capacity to migrate through a reconstituted basement membrane (Matrigel) in response to a chemotactic stimulus, which correlated with diminished matrix metalloproteinase-2 (MMP-2) activity by gelatin zymography and diminished MMP-2 transcription of a minimal MMP-2 promoter. In contrast, a lack of DDR2 had no effect on cell motility or alpha-smooth muscle actin or vinculin expression. Additionally, expression of type I collagen was greatly reduced in DDR2(-/-) cells. Stable reconstitution of either wild-type DDR2 or constitutively active chimeric DDR2 in DDR2(-/-) cells by retroviral infection restored cell proliferation, migration through a reconstituted basement membrane (Matrigel), and MMP-2 levels to those of DDR2(+/-) fibroblasts. These data establish a role for DDR2 in critical events during wound repair.