A central tenet of fibrinolysis is that tissue plasminogen activator–dependent (t-PA– dependent) conversion of plasminogen to active plasmin requires the presence of the cofactor/substrate fibrin. However, previous in vitro studies have suggested that the endothelial cell surface protein annexin II can stimulate t-PA–mediated plasminogen activation in the complete absence of fibrin. Here, homozygous annexin II–null mice displayed deposition of fibrin in the microvasculature and incomplete clearance of injury-induced arterial thrombi. While these animals demonstrated normal lysis of a fibrin-containing plasma clot, t-PA–dependent plasmin generation at the endothelial cell surface was markedly deficient. Directed migration of annexin II–null endothelial cells through fibrin and collagen lattices in vitro was also reduced, and an annexin II peptide mimicking sequences necessary for t-PA binding blocked endothelial cell invasion of Matrigel implants in wild-type mice. In addition, annexin II–deficient mice displayed markedly diminished neovascularization of fibroblast growth factor–stimulated cornea and of oxygen-primed neonatal retina. Capillary sprouting from annexin II–deficient aortic ring explants was markedly reduced in association with severe impairment of activation of metalloproteinase-9 and -13. These data establish annexin II as a regulator of cell surface plasmin generation and reveal that impaired endothelial cell fibrinolytic activity constitutes a barrier to effective neoangiogenesis.