Matriptase, a transmembrane serine protease, is broadly expressed by, and crucial for the integrity of, the epithelium. Matriptase is synthesized as a zymogen and undergoes autoactivation to become an active protease that is immediately inhibited by, and forms complexes with, hepatocyte growth factor activator inhibitor (HAI-1). To investigate where matriptase is activated and how it is secreted in vivo, we determined the expression and activation status of matriptase in seminal fluid and urine and the distribution and subcellular localization of the protease in the prostate and kidney. The in vivo studies revealed that while the latent matriptase is localized at the basolateral surface of the ductal epithelial cells of both organs, only matriptase-HAI-1 complexes and not latent matriptase are detected in the body fluids, suggesting that activation, inhibition, and transcytosis of matriptase would have to occur for the secretion of matriptase. These complicated processes involved in the in vivo secretion were also observed in polarized Caco-2 intestinal epithelial cells. The cells target latent matriptase to the basolateral plasma membrane where activation, inhibition, and secretion of matriptase appear to take place. However, a proportion of matriptase-HAI-1 complexes, but not the latent matriptase, appears to undergo transcytosis to the apical plasma membrane for secretion. When epithelial cells lose their polarity, they secrete both latent and activated matriptase. Although most epithelial cells retain very low levels of matriptase-HAI-1 complex by rapidly secreting the complex, gastric chief cells may activate matriptase and store matriptase-HAI-1 complexes in the pepsinogen-secretory granules, suggesting an intracellular activation and regulated secretion in these cells. Taken together, while zymogen activation and closely coupled HAI-1-mediated inhibition are common features for matriptase regulation, the cellular location of matriptase activation and inhibition, and the secretory route for matriptase-HAI-1 complex may vary along with the functional divergence of different epithelial cells.