The serpin plasminogen activator inhibitor-1 (PAI-1) spontaneously adopts an inactive or latent conformation by inserting the N-terminal part of the reactive center loop as strand 4 into the major beta-sheet (sheet A). To examine factors that may regulate reactive loop insertion in PAI-1, we determined the inactivation rate of the inhibitor in the pH range 4.5-13. Below pH 9, inactivation led primarily to latent PAI-1, and one predominant effect of pH on the corresponding rate constant could be observed. Protonation of a group exhibiting a pKa of 7.6 (25 degrees C, ionic strength = 0.15 M) reduced the rate of formation of latent PAI-1 by a factor of 35, from 0.17 h-1 at pH 9 to about 0.005 h-1 below pH 6. The ionization with a pKa 7.6 was found to have no effect on the rate by which PAI-1 inhibits trypsin and is therefore unlikely to change the flexibility of the loop or the orientation of the reactive center. The peptides Ac-TEASSSTA and Ac-TVASSSTA (cf. P14-P7 in the reactive loop of PAI-1) formed stable complexes with PAI-1 and converted the inhibitor to a substrate for tissue type plasminogen activator. We found that peptide binding and formation of latent PAI-1 are mutually exclusive events, similarly affected by the pKa 7.6 ionization. This is direct evidence that external peptides can substitute for strand 4 in beta-sheet A of PAI-1 and that the pKa 7.6 ionization regulates insertion of complementary, internal or external, strands into this position. A model that accounts for the observed pH effects is presented, and the identity of the ionizing group is discussed based on the structure of latent PAI-1. The group is tentatively identified as His-143 in helix F, located on top of sheet A.