We previously discovered the implication of membrane-type 5-matrix metalloproteinase (MT5-MMP) in Alzheimer’s disease AD pathogenesis. Here we shed new light on pathogenic mechanisms by which MT5-MMP controls APP processing and the fate of amyloid beta peptide (Aβ), its precursor C99 and C83. We found in HEK carrying the APP Swedish familial mutation (HEKswe) that MT5-MMP-mediated processing of APP that releases the soluble 95 kDa form (sAPP95), was hampered by the removal of the C-terminal non-catalytic domains of MT5-MMP. Catalytically inactive MT5-MMP variants increased the levels of Aβ and promoted APP/C99 sorting in the endo-lysosomal system. We found interaction of C99 with the C-terminal portion of MT5-MMP, the deletion of which caused a strong degradation of C99 by the proteasome, preventing Aβ accumulation. These findings reveal novel mechanisms for MT5-MMP control of APP metabolism and C99 fate involving proteolytic and non-proteolytic actions mainly mediated by the C-terminal part of the proteinase.