Irreversible tissue recession in chronic inflammatory diseases is associated with dysregulated immune activation and production of tissue degradative enzymes. In this study, we identified elevated levels of matrix metalloproteinase (MMP)-12 in gingival tissue of patients with the chronic inflammatory disease periodontitis (PD). The source of MMP12 was cells of monocyte origin as determined by the expression of CD14, CD68, and CD64. These MMP12-producing cells showed reduced surface levels of the coinhibitory molecule CD200R. Similarly, establishing a multicellular three-dimensional model of human oral mucosa with induced inflammation promoted MMP12 production and reduced CD200R surface expression by monocyte-derived cells. MMP12 production by monocyte-derived cells was induced by CSF2 rather than the cyclooxygenase-2 pathway, and treatment of monocyte-derived cells with a CD200R ligand reduced CSF2-induced MMP12 production. Further, MMP12-mediated degradation of the extracellular matrix proteins tropoelastin and fibronectin in the tissue model coincided with a loss of Ki-67, a protein strictly associated with cell proliferation. Reduced amounts of tropoelastin were confirmed in gingival tissue from PD patients. Thus, this novel association of the CD200/CD200R pathway with MMP12 production by monocyte-derived cells may play a key role in PD progression and will be important to take into consideration in the development of future strategies to diagnose, treat, and prevent PD.