The molecular mechanisms underlying cerebral angiogenesis have not been fully investigated. Using primary mouse brain endothelial cells (MBECs) and a capillary-like tube formation assay, we investigated whether the sonic hedgehog (Shh) signaling pathway is coupled with the plasminogen/plasmin system in mediating cerebral angiogenesis. We found that incubation of MBECs with recombinant human Shh (rhShh) substantially increased the tube formation in naïve MBECs. This was associated with increases in tissue plasminogen activator (tPA) activation and reduction of plasminogen activator inhibitor 1 (PAI-1). Blockage of the Shh pathway with cyclopamine abolished the induction of tube formation and the effect of rhShh on tPA and PAI-1. Addition of PAI-1 reduced rhShh-augmented tube formation. Genetic ablation of tPA in MBECs impaired tube formation and downregulated of vascular endothelial growth factor (VEGF) and angiopoietin 1 (Ang1). Addition of rhShh to tPA-/- MBECs only partially restored the tube formation and upregulated Ang1, but not VEGF, although rhShh increased VEGF and Ang1 expression on wild-type MBECs. Complete restoration of tube formation in tPA-/- MBECs was observed only when both exogenous Shh and tPA were added. The present study provides evidence that tPA and PAI-1 contribute to Shh-induced in vitro cerebral angiogenesis.