Discoidin domain receptor 2 (DDR2) is a kind of protein tyrosine kinases associated with cell proliferation and tumor metastasis, and collagen, identified as a ligand for DDR2, up-regulates matrix metallloproteinase 1 (MMP-1) and MMP-2 expression in cellular matrix. To investigate the roles of DDR2 in destruction of cartilage in rheumatoid arthritis (RA) and tumor metastasis, we tried to express extracellular domain of DDR2 fused with a His tag to increase protein solubility and facilitate purification (without signal peptide and transmembrane domain, designated DR) in Pichia pastoris, purify the expressed protein, and characterize its function, for purpose of future application as a specific DDR2 antagonist. Two clones of relative high expression of His-DR were obtained. After purification by a Ni-NTA (nitric-tri-acetic acid) chromatographic column, soluble fused His-DR over 90% purity were obtained. Competitive binding inhibition assay demonstrated that expressed His-DR could block the binding of DDR2 and natural DDR2 receptors on NIT3T3 and synovial cell surfaces. Results of RT-PCR, Western blotting, and gelatinase zymography showed that His-DR was capable of inhibiting MMP-1 and MMP-2 secretion from NIT3T3 cells and RA synoviocytes stimulated by collagen II. For MMP-1, the inhibitory effect was displayed at the levels of mRNA and protein, whereas for MMP-2 it was demonstrated at the level of protein physiological activity. All these findings suggested that the fused expressed His-DR inhibited the activity of natural DDR2, and relevant MMP-1 and MMP-2 expression in synoviocytes and NIH3T3 cells provoked by collagen II.