Metalloprotease that plays key roles in regulating the formation of the extracellular matrix (ECM) via processing of various precursor proteins into mature functional enzymes or structural proteins. Thereby participates in several developmental and physiological processes such as cartilage and bone formation, muscle growth and homeostasis, wound healing and tissue repair (PubMed:24419319, PubMed:8951074, PubMed:28068493). Roles in ECM formation include cleavage of the C-terminal propeptides from procollagens such as procollagen I, II and III or the proteolytic activation of the enzyme lysyl oxidase LOX, necessary to formation of covalent cross-links in collagen and elastic fibers (PubMed:20181949). Additional substrates include matricellular thrombospondin-1/THBS1 whose cleavage leads to cell adhesion disruption and TGF-beta activation (By similarity). Cleavage of the C-terminal propeptide at Ala-|-Asp in type I and II procollagens and at Arg-|-Asp in type III. Binds 1 zinc ion per subunit. Activity is increased by the procollagen C-endopeptidase enhancer protein. Interacts with POSTN, the interaction promotes deposition on the extracellular matrix. Co-localizes with POSTN in the Golgi. At high levels in embryonic maternal deciduum and floor plate region of the neural tube. Less in developing membranous and endochondral bone, submucosa of intestine, dermis of skin and the mesenchyme of spleen and lung. Deletion mice are perinatally lethal, with the most obvious gross abnormality being failure of ventral body wall closure, and persistent herniation of the gut. This phenotype likely reflects the defective and weakened nature of extracellular matrix (ECM) in these embryos (PubMed:8951074). Double knockout mice (BMP1 and TLL1) display progressive defects in teeth and bone development (PubMed:28068493, PubMed:24419319).