Tryptase epsilon is a member of the chromosome 16p13.3 family of human serine proteases that is preferentially expressed by epithelial cells. Recombinant pro-tryptase epsilon was generated to understand how the exocytosed zymogen might be activated outside of the epithelial cell, as well as to address its possible role in normal and diseased states. Using expression/site-directed mutagenesis approaches, we now show that Lys20, Cys90, and Asp92 in the protease's substrate-binding cleft regulate its enzymatic activity. We also show that Arg(-1) in the propeptide domain controls its ability to autoactivate. In vitro studies revealed that recombinant tryptase epsilon possesses a restricted substrate specificity. Once activated, tryptase epsilon cannot be inhibited effectively by the diverse array of protease inhibitors present in normal human plasma. Moreover, this epithelium protease is not highly susceptible to alpha1-antitrypsin or secretory leukocyte protease inhibitor, which are present in the lung. Recombinant tryptase epsilon could not cleave fibronectin, vitronectin, laminin, single-chain tissue-type plasminogen activator, plasminogen, or any prominent serum protein. Nevertheless, tryptase epsilon readily converted single-chain pro-urokinase-type plasminogen activator (pro-uPA/scuPA) into its mature, enzymatically active protease. Tryptase epsilon also was able to induce pro-uPA-expressing smooth muscle cells to increase their migration through a basement membrane-like extracellular matrix. The ability to activate uPA in the presence of varied protease inhibitors suggests that tryptase epsilon plays a prominent role in fibrinolysis and other uPA-dependent reactions in the lung.