The respective roles of urokinase plasminogen activator (u-PA) and the u-PA receptor in extracellular matrix degradation was investigated. Human pro-u-PA and the human u-PA receptor were expressed independently by two different mouse LB6 cell lines. The matrix degradation capacity of these cell lines individually or in coculture was studied. Although pro-u-PA-producing cells alone degrade the matrix in the presence of plasminogen, u-PA-receptor producing cells do not. Cocultivation of a small fraction of pro-u-PA-producing cells with the receptor-producing cells increases the rate of matrix degradation at least threefold. By immunoprecipitation it was shown that cocultivation of the two cell lines increases the conversion of the inactive pro-u-PA to the active two chain u-PA. The enhancement of matrix degradation and of pro-u-PA activation requires actual binding of pro-u-PA to its receptor because it is inhibited by u-PA-receptor antagonists. The u-PA receptor must be cell associated, as binding of pro-u-PA to a receptor solubilized from the cell surface with phosphatidyl-inositol specific phospholipase C did not enhance the activation of pro-u-PA in the presence of plasminogen. The finding that activity of u-PA is enhanced when it is bound to its receptor, even when the receptor is produced by a different cell, might have important implications for the mechanisms of u-PA-induced extracellular proteolysis in vivo.