The urokinase-type plasminogen activator receptor (uPAR) is released from human cancers and is readily detected in blood. In animal models, soluble uPAR (SuPAR) antagonizes cancer progression; however, the mechanism by which SuPAR functions in vivo remains unclear. It is generally thought that SuPAR scavenges uPA and prevents its interaction with membrane-anchored uPAR. In this study, we demonstrate a novel molecular mechanism by which SuPAR may inhibit cancer progression. We show that SuPAR has the potential to directly and in a uPA-independent manner block the signaling activity of membrane-anchored uPAR. Whether SuPAR inhibits signaling is cell type-specific, depending on the state of the endogenous uPA-uPAR signaling system. In uPAR-deficient cells that lack endogenous uPAR signaling, including uPAR-/-murine embryonic fibroblasts and human embryonal kidney 293 cells, SuPAR functions as a partial signaling agonist that activates ERK/mitogen-activated protein kinase. By contrast, in cells with potent autocrine uPA-uPAR signaling systems, including MDA-MB 231 breast cancer cells and low density lipoprotein receptor-related protein-1-deficient murine embryonic fibroblasts, SuPAR substantially decreases ERK activation. The mechanism probably involves competitive displacement of membrane-anchored uPAR-uPA complex from signaling adaptor proteins. As a result of its effects on cell signaling, SuPAR blocks cell growth and inhibits cellular invasion of Matrigel. Cleavage of SuPAR by proteinases increases its signaling agonist activity and reverses its inhibitory effects on growth and invasion. Thus, proteolytic cleavage represents a molecular switch that neutralizes the anticancer activity of SuPAR.