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Increased T helper (Th)1/Th17 immune responses are a hallmark of Crohn’s disease (CD) immunopathogenesis. CD90+ (myo-)fibroblasts (MFs) are abundant cells in the normal (N) intestinal mucosa contributing to mucosal tolerance via suppression of Th1 cell activity through cell surface membrane-bound PD-L1 (mPD-L1). CD-MFs have a decreased level of mPD-L1. Consequently, mPD-L1-mediated suppression of Th1 cells by CD-MFs is decreased, yet the mechanism responsible for the reduction in mPDL-1 is unknown. Increased expression of matrix metalloproteinases (MMPs) has been reported in CD. Herein we observed that when compared to N- and ulcerative colitis (UC)-MFs, CD-MFs increase in LPS-inducible levels of MMP-7 and -9 with a significant increase in both basal and inducible MMP-10. A similar pattern of MMP expression was observed in the CD-inflamed mucosa. Treatment of N-MFs with a combination of recombinant human MMP-7, -9 and -10 significantly decreased mPD-L1. In contrast, inhibition of MMP activity with MMP inhibitors or anti-MMP-10 neutralizing antibodies restores mPD-L1 on CD-MFs. CD-MFs demonstrated reduced capacity to suppress Th1 and Th17 responses from activated CD4+ T cells. By contrast, supplementation of the CD-MF:T-cell co-cultures with MMP inhibitors or anti-MMP neutralizing antibodies restored the CD-MF-mediated suppression. Our data suggest that (i) increased MMP-10 expression by CD-MFs and concomitant cleavage of PD-L1 from the surface of CD-MFs are likely to be one of the factors contributing to the decrease of mPD-L1-mediated suppression of Th1/Th17 cells in CD; and (ii) MMPs are likely to have a significant role in the intestinal mucosal immune responses.