Hepatocyte growth factor (HGF) is a potent mitogen, motogen, and morphogen for epithelial cells in vitro. It appears likely that HGF participates in tissue regeneration following hepatic and renal injury in vivo. The activity of HGF is localized to the injured tissues by a proteolytic activation system; HGF remains as an inactive single-chain form in the normal state and is converted to an active heterodimeric form in response to tissue injury. A protease responsible for this conversion is induced in the injured liver, but it has not yet been identified. We have previously purified and characterized HGF activator (HGFA), a serum-derived serine protease that efficiently activates single-chain HGF in vitro. In this study, we found that the HGF-converting activity in the injured liver was inhibited by an anti-HGFA antibody. We also found that the active form of HGFA was generated exclusively in the injured tissues. Thus, it appears likely that HGFA is the key enzyme that regulates the activity of HGF in the injured tissues. We also analyzed the heparin binding properties of the precursor and mature forms of HGFA. HGFA had a weak affinity for heparin near the physiological salt concentration in its precursor form but acquired a strong affinity for heparin upon activation that is linked to blood coagulation. This property may ensure the local action of this enzyme at the site of tissue injury.