The N-terminal fragment of PRL (16K PRL) is an antiangiogenic factor that, in vitro, inhibits several components of angiogenesis including basic fibroblast growth factor (bFGF)-induced cell division, migration, and organization of capillary endothelial cells. An essential step in the regulation of angiogenesis is the activation of urokinase (urokinase type plasminogen activator, uPA), which in turn activates a cascade of proteases that play essential roles in endothelial cell migration and tissue remodeling. Treatment of bovine capillary endothelial cells (BBEC) with 16K PRL inhibited bFGF-stimulated urokinase activity in BBEC as detected by plasminogen substrate gel assay. 16K PRL did not appear to be acting via an effect on uPA expression because no change in messenger RNA levels were observed. However, protein levels of plasminogen activator inhibitor-1 (PAI-1), a specific inhibitor of urokinase, were increased by 16K PRL independent of the action of bFGF. The 16K PRL-induced increase in PAI-1 protein levels appear to be the result of increased expression of the PAI-1 gene. Increased production of PAI-1 induced by 16K PRL results in the formation of inactive PAI-1/uPA complexes, consistent with the observed decrease in uPA activity.