Current Food and Drug Administration-approved cancer nanotherapeutics, which passively accumulate around leaky regions of the tumor vasculature because of an enhanced permeation and retention (EPR) effect, have provided only modest survival benefits. This suboptimal outcome is likely due to physiological barriers that hinder delivery of the nanotherapeutics throughout the tumor. Many of these nanotherapeutics are ≈100 nm in diameter and exhibit enhanced accumulation around the leaky regions of the tumor vasculature, but their large size hinders penetration into the dense collagen matrix. Therefore, we propose a multistage system in which 100-nm nanoparticles “shrink” to 10-nm nanoparticles after they extravasate from leaky regions of the tumor vasculature and are exposed to the tumor microenvironment. The shrunken nanoparticles can more readily diffuse throughout the tumor's interstitial space. This size change is triggered by proteases that are highly expressed in the tumor microenvironment such as MMP-2, which degrade the cores of 100-nm gelatin nanoparticles, releasing smaller 10-nm nanoparticles from their surface. We used quantum dots (QD) as a model system for the 10-nm particles because their fluorescence can be used to demonstrate the validity of our approach. In vitro MMP-2 activation of the multistage nanoparticles revealed that the size change was efficient and effective in the enhancement of diffusive transport. In vivo circulation half-life and intratumoral diffusion measurements indicate that our multistage nanoparticles exhibited both the long circulation half-life necessary for the EPR effect and the deep tumor penetration required for delivery into the tumor's dense collagen matrix.