The plasminogen/plasmin system, urokinase-type plasminogen activator (uPA), its receptor (uPAR), and its inhibitor (PAI-1), influence extracellular proteolysis and cell migration in lung injury or neoplasia. In this study, we sought to determine whether tcuPA (two chain uPA) alters expression of its major inhibitor PAI-1 in lung epithelial cells. The expression of PAI-1 was evaluated at the protein and mRNA level by Western blot, immunoprecipitation, and Northern blot analyses. We found that tcuPA treatment enhanced PAI-1 protein and mRNA expression in Beas2B lung epithelial cells in a time- and concentration-dependent manner. The tcuPA-mediated induction of PAI-1 involves post-transcriptional control involving stabilization of PAI-1 mRNA. Inactivation of the catalytic activity of tcuPA had little effect on PAI-1 induction and the activity of the isolated amino-terminal fragment was comparable with full-length single- or two-chain uPA. In contrast, deletion of either the uPA receptor binding growth factor domain or kringle domain (kringle) from full-length single chain uPA markedly attenuated the induction of PAI-1. Induction of PAI-1 by exposure of lung epithelial cells to uPA is a newly recognized pathway by which PAI-1 could regulate local fibrinolysis and urokinase-dependent cellular responses in the setting of lung inflammation or neoplasia.