Nerve growth factor-gamma (NGF-gamma) is a serine proteinase which reversibly associates with the well characterized neurotrophin NGF-beta. In this study, we demonstrated that NGF-gamma cleaves recombinant single chain urokinase-type plasminogen activator (scu-PA), converting the zymogen into a two-chain form (tcu-PA). The apparent masses of the two u-PA chains were 33 and 22 kDa, as determined by SDS-polyacrylamide gel electrophoresis (PAGE). There was no evidence for secondary cleavage sites or further digestion of tcu-PA by NGF-gamma, even when conversion of scu-PA was complete. The NH2-terminal sequence of the 33-kDa band was Ile-Ile-Gly-Gly-Glu, indicating that NGF-gamma cleaved scu-PA at Lys158-Ile159, the plasmin cleavage site. Cleavage of scu-PA by NGF-gamma resulted in scu-PA activation. The kcat and Km for this reaction, as determined in a continuous assay with the tcu-PA-specific substrate L-pyroglutamyl-glycyl-arginine-p-nitroanilide hydrochloride (S-2444), were (4.1 +/- 0.6) x 10(-2) s-1 and 2.3 +/- 0.4 microM, respectively. The catalytic efficiency (kcat/Km) for scu-PA activation by NGF-gamma was 1.3 x 10(4) M-1 s-1, compared with 6.2 x 10(5) M-1 s-1 for the activation of scu-PA by plasmin. NGF-gamma-cleaved scu-PA which was bound to receptors on U937 monocytoid cells. The apparent masses of the resulting u-PA cleavage products were identical to those generated in solution as determined by SDS-PAGE. Cell-associated scu-PA was activated by NGF-gamma, as determined by the generation of activity against the tcu-PA-specific fluorogenic substrate, glutamyl-glycyl-arginine-7-amino-4-methyl coumarin. By activating scu-PA, NGF-gamma may initiate the u-PA-dependent cell-surface proteinase cascade and support NGF-beta activities which involve cellular migration and/or extracellular matrix remodeling.