Plasminogen activation is observed in the human epidermis during reepithelialization of epidermal defects and under certain pathological conditions. The activation reaction depends on keratinocyte-associated plasminogen activators (PAs), which convert the ubiquitous proenzyme plasminogen into the active trypsin-like serine proteinase plasmin. The PAs are controlled by PA inhibitors (PAIs), of which two major types are known: PAI-1 and PAI-2. In vitro and in vivo keratinocytes express both PAIs. In the current study, we have addressed the possible function of PAI-2 in regulating extracellular PA activity in cultured normal human epidermal keratinocytes (NHEK), the human keratinocyte cell line (HaCaT), and a Ha-ras transfected HaCaT variant (HaRas). PAI-2 was detected intracellularly in all three cell types. Whereas only the NHEK and the HaCaT cells secreted detectable levels of PAI-2 into the culture medium, all three cell types released urokinase-type PA (uPA) into the supernatants. When comparing HaCaT and HaRas cells, we found that the cell lines secreted comparable levels of uPA antigen, whereas the levels of uPA activity were low in the presence of PAI-2, indicating that PAI-2 serves to regulate uPA activity. This assumption was supported by the findings that PAI-2 formed complexes with secreted uPA and that uPA/PAI-2 complexes were present at the surface of the PAI-2-secreting HaCaT cells but not at the surface of PAI-2 nonsecreting HaRas cells. Finally, PAI-2 was found to counteract the uPA-dependent and plasmin-mediated detachment of cultured HaCaT cells. Taken together, our findings indicate that secreted PAI-2 serves to regulate the activity of extracellular uPA in keratinocytes.