Tissue inhibitor of matrix metalloproteinase–2 (TIMP-2) belongs to a small family of endogenous proteins that inhibits a group of enzymes, the matrix metalloproteinases (MMPs). TIMP-2 inhibits endothelial cell proliferation and migration in vitro and angiogenesis in vivo, through MMP-dependent and -independent mechanisms. However, little is known regarding the contribution of these mechanisms to the antitumor effects of TIMP-2. Using a retroviral delivery system, we stably overexpressed TIMP-2 and its mutant Ala+TIMP-2 (devoid of MMP inhibitory activity) in human adenocarcinoma A549 cells. Using real time PCR, and enzyme-linked immunosorbent assay (ELISA), we confirmed enhanced TIMP-2 expression and its MMP inhibitory activity by reverse zymography. In vitro, growth assays suggested that TIMP-2 and Ala+TIMP-2 did not alter basal cell proliferation rates, however, tumor cell migration and invasion were inhibited. In vivo, both TIMP-2 and Ala+TIMP-2 A549 xenografts exhibited reduced growth rate, CD31 immunostaining indicated decreased intratumoral microvascular density, and TUNEL demonstrated enhanced tumor cell apoptosis. Immunoblotting and immunohistochemical analyses of A549 xenograft tissues with either phospho-FAK (Tyr397) or phospho-AKT (Ser473) showed decreased activation in both TIMP-2 and Ala+TIMP-2 tumor cells. We conclude that TIMP-2-mediated inhibition of tumor growth occurs, at least in part, independently of MMP inhibition, and is a consequence of both direct effects of TIMP-2 on tumor cells and modulation of the tumor microenvironment.