Activation of hepatocyte growth factor/scatter factor (HGF/SF) is a critical limiting step in the HGF/SF-induced signaling pathway mediated by MET receptor tyrosine kinase. Although HGF/SF-MET signaling could have potentially important roles in the invasive growth of tumors and tumor angiogenesis, little is known about the regulation of HGF/SF activation in the tumor tissues. This activation occurs in the extracellular milieu caused by proteolytic cleavage at the bond between Arg194-Val195 in the single-chain HGF precursor to generate the active two-chain heterodimeric form. Here we show that activation of HGF/SF is significantly enhanced in colorectal carcinoma tissues compared with normal colorectal mucosa, and HGF activator (HGFA), a recently identified factor XII-like serine proteinase, is critically involved in this process. Furthermore, we also show that HGF activator inhibitor type 1 (HAI-1) should have an important regulatory role in the pericellular activation of HGF/SF having diverse roles acting as a cell surface specific inhibitor of active HGFA and a reservoir of this enzyme on the cell surface. The latter property might paradoxically ensure the concentrated pericellular HGFA activity in certain cellular conditions in which shedding of HAI-1/HGFA complex from the plasma membrane is upregulated.