We previously demonstrated that TIMP-2 increases the association of Crk with C3G and via subsequent activation of Rap1 enhances the expression of RECK, a membrane-anchored MMP inhibitor. In the present study, we investigate the mechanism of how the TIMP-2 signal is transduced from the α3β1 integrin receptor to the Crk-C3G-Rap1 molecular complex. TIMP-2 treatment of human microvascular endothelial cells (hMVECs) increased the phosphorylation levels of Src at Tyr-527, the negative regulatory site, through enhanced association of Src with Csk. This results in the reduction of Src kinase activity and dephosphorylation of paxillin at Tyr-31/118, the target sites for Src kinase phosphorylation and also the binding sites for the downstream effector Crk. Such TIMP-2 effects accompany the disassembly of paxillin-Crk-DOCK180 molecular complex and, in turn, Rac1 inactivation. On the contrary, levels of paxillin-Crk-C3G complex formation are not reduced, rather slightly increased, which is consistent with our previous finding. Therefore, TIMP-2-mediated inhibition of Src kinase activity leads to the signaling switch from Rac1 to Rap1, thereby leading to enhanced RECK expression.