The scattering of Madin-Darby canine kidney (MDCK) epithelial cells by scatter factor/hepatocyte growth factor (SF/HGF) is associated with transcriptional induction of the urokinase gene, which occurs essentially through activation of an EBS/AP1 response element. We have investigated the signal transduction pathways leading to this transcriptional response. We found that SF/HGF induces rapid and sustained phosphorylation of the extracellular signal-regulated kinase (ERK) MAPK while stimulating weakly and then repressing phosphorylation of the JUN N-terminal kinase (JNK) MAPK for several hours. This delayed repression of JNK was preceded by phosphorylation of the MKP2 phosphatase, and both MKP2 induction and JNK dephosphorylation were under the control of MEK, the upstream kinase of ERK. ERK and MKP2 stimulate the EBS/AP1-dependent transcriptional response to SF/HGF, but not JNK, which inhibits this response. We further demonstrated that depending on cell density, the RAS-ERK-MKP2 pathway controls this transrepressing effect of JNK. Together, these data demonstrate that in a sequential manner SF/HGF activates ERK and MKP2, which in turn dephosphorylates JNK. This sequence of events provides a model for efficient cell scattering by SF/HGF at low cell density.