A central tenet of fibrinolysis is that tissue plasminogen activator-dependent (t-PA- dependent) conversion of plasminogen to active plasmin requires the presence of the cofactor/substrate fibrin. However, previous in vitro studies have suggested that the endothelial cell surface protein annexin II can stimulate t-PA-mediated plasminogen activation in the complete absence of fibrin. Here, homozygous annexin II-null mice displayed deposition of fibrin in the microvasculature and incomplete clearance of injury-induced arterial thrombi. While these animals demonstrated normal lysis of a fibrin-containing plasma clot, t-PA-dependent plasmin generation at the endothelial cell surface was markedly deficient. Directed migration of annexin II-null endothelial cells through fibrin and collagen lattices in vitro was also reduced, and an annexin II peptide mimicking sequences necessary for t-PA binding blocked endothelial cell invasion of Matrigel implants in wild-type mice. In addition, annexin II-deficient mice displayed markedly diminished neovascularization of fibroblast growth factor-stimulated cornea and of oxygen-primed neonatal retina. Capillary sprouting from annexin II-deficient aortic ring explants was markedly reduced in association with severe impairment of activation of metalloproteinase-9 and -13. These data establish annexin II as a regulator of cell surface plasmin generation and reveal that impaired endothelial cell fibrinolytic activity constitutes a barrier to effective neoangiogenesis.