In previous work we identified key roles of membrane-type 5-matrix metalloproteinase (MT5-MMP) in Alzheimer’s disease (AD) pathogenesis. More specifically, we uncovered the involvement of the C-terminal domains of the proteinase in the processing of amyloid precursor protein (APP) and the fate of some of its major toxic metabolites (e.g. C99, A). We further described these effects as being dependent on MT5-MMP transmembrane (TM) and intracellular (IC) domains, leading us to hypothesize that modifications in these domains could represent a therapeutic strategy to modulate APP toxic metabolites. To test this, here we generated MT5-MMP variants carrying amino acid deletions or substitutions in entire proteinase domains or in selected amino acid clusters in the IC domain. MT5-MMP variants were co-transfected in human cell lines overexpressing C99, reminiscent of an AD setting. We have identified mutations in the IC domain that induce C99 degradation and a decrease in A levels, while other mutations have divergent effects on these APP metabolites. Furthermore, high content imaging revealed the importance of MT5-MMP IC modifications in C99 subcellular trafficking through the endomembrane system and how this impacts C99 processing. Proximity ligation assays also highlight the importance of the IC domain in MT5-MMP co-localization, and possible interaction, with C99. In a translational effort, we synthetized and a functionalized a peptide mimicking the MT5-MMP IC domain carrying mutations in the N-terminus. We demonstrated that this synthetic peptide efficiently decreased C99 levels in our AD in vitro model. Overall, our study highlights the role of a selected group of amino acids in the C-terminal domains of MT5-MMP as the basis for a better understanding of the proteinase’s contribution to APP metabolism. Moreover, this study provides a new approach for designing peptide-based therapeutic strategies against AD based on the properties of specific MT5-MMP domains to prevent C99 and A accumulation.