The sea urchin embryo develops from an encased to a free-living larva by secreting at an early stage the hatching enzyme, a metalloprotease which hydrolyses a protective envelope derived from the egg extracellular matrix. Genomic clones containing the entire hatching enzyme gene were isolated from a lambda phage sea urchin library and the complete sequence of the transcription unit was determined. The hatching enzyme gene spans 6.3 kb and comprises 9 exons. The exon/intron organization of the hatching enzyme gene is similar but not identical to those of the vertebrate collagenases and stromelysins. The position and/or phase of several introns are different even in the N-terminal moiety where similarity between echinoderm and vertebrate enzymes was first detected. The active-center domain is encoded by a 1-1 class exon whose sequence, length and borders are highly conserved and might be considered as coding for a protein module. Adjacent to the active-center exon, the hatching enzyme gene has an additional 1-1 exon which codes for a threonine-rich region. This provides further evidence that the matrix-degrading metalloproteinases evolved by shuffling exons of the 1-1 class. Phylogeny analysis indicates a close relationship between the sea urchin and vertebrate enzymes.