A variety of proteases have been implicated in prostate cancer (PC) bone metastasis, but the individual contributions of these enzymes remain unclear. Urokinase-type plasminogen activator (uPA), a serine protease, can activate plasminogen and stimulate signaling events on binding its receptor uPAR. In the present study, we investigated the functional role of PC cell-associated uPA in intraosseous tumor growth and bone matrix degradation. Using a severe combined immunodeficient-human mouse model, we found that PC3 cells were the major source of uPA in the experimental bone tumor. Injection of uPA-silenced PC3 cells in bone xenografts resulted in significant reduction of bone tumor burdens and protection of trabecular bones from destruction. The suppressed tumor growth was associated with the level of uPA expression but not with its activity. An increase in the expression of PAI-1, the endogenous uPA inhibitor, was found during in vitro tumor-stromal interactions. Up-regulation of PAI-1 in bone stromal cells and preosteoclasts/osteoblasts was due to soluble factor(s) released by PC cells, and the enhanced PAI-1 expression in turn stimulated PC cell migration. Our results indicate that both tumor-derived uPA and tumor-stroma-induced PAI-1 play important roles in intraosseous metastatic PC growth through regulation of a uPA-uPAR-PAI-1 axis by autocrine/paracrine mechanisms.