This study delineates the regulatory effects of inflammatory cytokines on mononuclear phagocyte plasminogen activator (PA) activity. The mechanisms by which mononuclear phagocytes modulate PA activity are described. Mononuclear phagocytes regulate net PA activity by the balanced expression of urokinase-type PA (uPA), in either secreted or membrane-associated forms, and a specific plasminogen activator inhibitor, PAI-2. Therefore, understanding how immunomodulators regulate macrophage PA activity requires that the comparative effects of uPA and PAI-2 be elucidated. We determined how recombinant interferon-γ (IFN) and tumor necrosis factor-α (TNF) regulate plasminogen activation in monoblast-like U937 cells and normal human monocytes. In U937 cells, both IFN and TNF induced concurrent increases in secreted PA and PA inhibitor activities. These effects were accompanied by increased immunoreactive uPA and PAI-2 in conditioned media (enzyme-linked immunosorbent assay) and steady-state levels of cellular uPA and PAI-2 mRNA (Northern analysis). To determine the relative abilities of IFN and TNF to either promote or inhibit plasmin generation, we directly compared the effects IFN and TNF, using optimal stimulating concentrations. IFN induced PA activity to 180% of the level achieved by TNF. In contrast, IFN elicited only 78% of the PA inhibitor produced by TNF stimulation. These differences in secreted activity can be explained by the shift in balance between uPA and PAI-2 proteins. Immunoreactive uPA was induced equally by IFN and TNF, but TNF generated higher levels of PAI-2. The same overall pattern of results was seen in normal human monocytes. IFN and TNF differ greatly in the ability to augment receptor-bound PA activity in U937 cells, as IFN induced a twofold increase but TNF had no effect. We conclude that IFN and TNF modulate mononuclear phagocyte proteolytic activity through coordinate regulation of secreted and receptor-bound uPA, balanced against concurrent expression of PAI-2. These effects are cytokine specific, as IFN is superior to TNF in stimulating expression of both secreted and receptor-associated PA activities. These properties suggest mechanisms by which mononuclear phagocytes control proteolysis in cytokinerich inflammatory foci.