Synaptogenesis requires orchestrated intercellular communication between synaptic partners, with trans-synaptic signals necessarily traversing the extracellular synaptomatrix separating presynaptic and postsynaptic cells. Extracellular matrix metalloproteinases (Mmps) regulated by secreted tissue inhibitors of metalloproteinases (Timps), cleave secreted and membrane-associated targets to sculpt the extracellular environment and modulate intercellular signaling. Here, we test the roles of Mmp at the neuromuscular junction (NMJ) model synapse in the reductionist Drosophila system, which contains just two Mmps (secreted Mmp1 and GPI-anchored Mmp2) and one secreted Timp. We found that all three matrix metalloproteome components co-dependently localize in the synaptomatrix and show that both Mmp1 and Mmp2 independently restrict synapse morphogenesis and functional differentiation. Surprisingly, either dual knockdown or simultaneous inhibition of the two Mmp classes together restores normal synapse development, identifying a reciprocal suppression mechanism. The two Mmp classes co-regulate a Wnt trans-synaptic signaling pathway modulating structural and functional synaptogenesis, including the GPI-anchored heparan sulfate proteoglycan (HSPG) Wnt co-receptor Dally-like protein (Dlp), cognate receptor Frizzled-2 (Frz2) and Wingless (Wg) ligand. Loss of either Mmp1 or Mmp2 reciprocally misregulates Dlp at the synapse, with normal signaling restored by co-removal of both Mmp classes. Correcting Wnt co-receptor Dlp levels in both Mmp mutants prevents structural and functional synaptogenic defects. Taken together, these results identify an Mmp mechanism that fine-tunes HSPG co-receptor function to modulate Wnt signaling to coordinate synapse structural and functional development.