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The Perlecan-Semaphorin 3A-Plexin A1-Neuropilin-1 (PSPN) Complex at the cell surface of prostate cancer (PCa) cells influences cell–cell cohesion and dyscohesion. We investigated matrix metalloproteinase-7/matrilysin (MMP-7)’s ability to digest components of the PSPN Complex in bone metastatic PCa cells using in silico analyses and in vitro experiments. Results demonstrated that in addition to the heparan sulfate proteoglycan, perlecan, all components of the PSPN Complex were degraded by MMP-7. To investigate the functional consequences of PSPN Complex cleavage, we developed a preformed microtumor model to examine initiation of cell dispersion after MMP-7 digestion. We found that while perlecan fully decorated with glycosaminoglycan limited dispersion of PCa microtumors, MMP-7 initiated rapid dyscohesion and migration even with perlecan present. Additionally, we found that a bioactive peptide (PLN4) found in perlecan domain IV in a region subject to digestion by MMP-7 further enhanced cell dispersion along with MMP-7. We found that digestion of the PSPN Complex with MMP-7 destabilized cell–cell junctions in microtumors evidenced by loss of co-registration of E-cadherin and F-actin. We conclude that MMP-7 plays a key functional role in PCa cell transition from a cohesive, indolent phenotype to a dyscohesive, migratory phenotype favoring production of circulating tumor cells and metastasis to bone.