Transforming growth factor-beta (TGF beta) is the most potent known inhibitor of keratinocyte growth. Pericellular proteolytic activity is usually high in proliferating and malignant cells and decreased in resting or growth-arrested cells. We have therefore analyzed the effects of TGF beta 1 on the production of plasminogen activator activity by normal human keratinocytes and a mouse keratinocyte cell line under serum-free conditions. The plasminogen activator activity of the culture medium was analyzed using caseinolysis-in-agar and zymography assays, immunoblotting, and Northern hybridization analysis for the plasminogen activators (PA) and PA inhibitor-1 (PAI-1). Alterations of radiolabeled polypeptides were observed in fluorograms of gels. It was found that like in human epidermoid carcinoma cells picomolar concentrations of TGF beta 1 (0.2-20 ng/ml) enhanced total plasminogen activator activity in both keratinocyte cell systems. Zymographic and immunoblotting analyses of the medium indicated that the activator was of the urokinase type (u-PA). Immunoprecipitation and Concanavalin A affinity chromatography of the culture medium indicated that the cells also started to produce PAI-1. Analysis of the pericellular matrix preparations of the keratinocytes showed that PAI-1 is deposited to the pericellular space. Evidently due to elevated u-PA activity PAI-1 was removed from the extracellular matrix more rapidly in TGF beta 1-treated cells than from control cultures. Northern hybridization analysis of human keratinocytes showed that TGF beta 1 rapidly elevated both u-PA and PAI-1 mRNA levels. Comparison of the temporal induction profiles indicated that the mRNA for u-PA increased more slowly but was more persistent than that of PAI-1. Actinomycin D inhibited the induction of both u-PA and PAI-1 mRNA, suggesting that the induction was due to increased transcription. The results suggest that enhanced plasminogen activator activity can be associated with growth inhibition also in nonmalignant cells like cultured human or murine keratinocytes.