Chronic inflammatory diseases are associated with connective tissue turnover that involves a series of proteases, which include the plasminogen activation system and the family of matrix metalloproteinases (MMPs). Urokinase-type plasminogen activator (uPA) and plasmin, in addition to their role in fibrinolysis and activation of pro-MMPs, have been shown to transduce intracellular signals through specific receptors. The potential for uPA and plasmin to also contribute to connective tissue turnover by directly regulating MMP production was examined in human monocytes. Both catalytically active high m.w. uPA, which binds to the uPAR, and low m.w. uPA, which does not, significantly enhanced MMP-1 synthesis by activated human monocytes. In contrast, the N-terminal fragment of uPA, which binds to uPAR, but lacks the catalytic site, failed to induce MMP-1 production, indicating that uPA-stimulated MMP-1 synthesis was plasmin dependent. Endogenous plasmin generated by the action of uPA or exogenous plasmin increased MMP-1 synthesis by signaling through annexin A2, as demonstrated by inhibition of MMP-1 production with Abs against annexin A2 and S100A10, a dimeric protein associated with annexin A2. Interaction of plasmin with annexin A2 resulted in the stimulation of ERK1/2 and p38 MAPK, cyclooxygenase-2, and PGE(2), leading to increased MMP-1 production. Furthermore, binding of inactive plasmin to annexin A2 inhibited plasmin induction of MMP-1, suggesting that inactive plasmin may be useful in suppressing inflammation.