The extracellular protease urokinase is known to be crucially involved in morphogenesis, tissue repair and tumor invasion by mediating matrix degradation and cell migration. Hepatocyte growth factor/scatter factor (HGF/SF) is a secretory product of stromal fibroblasts, sharing structural motifs with enzymes of the blood clotting cascade, including a zymogen cleavage site. HGF/SF promotes motility, invasion and growth of epithelial and endothelial cells. Here we show that HGF/SF is secreted as a single‐chain biologically inactive precursor (pro‐HGF/SF), mostly found in a matrix‐associated form. Maturation of the precursor into the active alpha beta heterodimer takes place in the extracellular environment and results from a serum‐dependent proteolytic cleavage. In vitro, pro‐HGF/SF was cleaved at a single site by nanomolar concentrations of pure urokinase, generating the active mature HGF/SF heterodimer. This cleavage was prevented by specific urokinase inhibitors, such as plasminogen activator inhibitor type‐1 and protease nexin‐1, and by antibodies directed against the urokinase catalytic domain. Addition of these inhibitors to HGF/SF responsive cells prevented activation of the HGF/SF precursor. These data show that urokinase acts as a pro‐HGF/SF convertase, and suggest that some of the growth and invasive cellular responses mediated by this enzyme may involve activation of HGF/SF.