Proteolytic processing of epithelial sodium channel (ENaC) subunits occurs as channels mature within the biosynthetic pathway. The proteolytic processing events of the alpha and gamma subunits are associated with channel activation. Furin cleaves the alpha subunit ectodomain at two sites, releasing an inhibitory tract and activating the channel. However, furin cleaves the gamma subunit ectodomain only once. A second distal cleavage in the gamma subunit induced by other proteases, such as prostasin and elastase, is required to release a second inhibitory tract and further activate the channel. We found that the serine protease plasmin activates ENaC in association with inducing cleavage of the gamma subunit at gammaLys194, a site distal to the furin site. A gammaK194A mutant prevented both plasmin-dependent activation of ENaC and plasmin-dependent production of a unique 70-kDa carboxyl-terminal gamma subunit cleavage fragment. Plasmin-dependent cleavage and activation of ENaC may have a role in extracellular volume expansion in human disorders associated with proteinuria, as filtered plasminogen may be processed by urokinase, released from renal tubular epithelium, to generate active plasmin.