Fibrosis is defined as a fibroproliferative or abnormal fibroblast activation‐related disease. Deregulation of wound healing leads to hyperactivation of fibroblasts and excessive accumulation of extracellular matrix (ECM) proteins in the wound area, the pathological manifestation of fibrosis. The accumulation of excessive levels of collagen in the ECM depends on two factors: an increased rate of collagen synthesis and or decreased rate of collagen degradation by cellular proteolytic activities. The urokinase/tissue type plasminogen activator (uPA/tPA) and plasmin play significant roles in the cellular proteolytic degradation of ECM proteins and the maintenance of tissue homeostasis. The activities of uPA/tPA/plasmin and plasmin‐dependent MMPs rely mostly on the activity of a potent inhibitor of uPA/tPA, plasminogen activator inhibitor‐1 (PAI‐1). Under normal physiologic conditions, PAI‐1 controls the activities of uPA/tPA/plasmin/MMP proteolytic activities and thus maintains the tissue homeostasis. During wound healing, elevated levels of PAI‐1 inhibit uPA/tPA/plasmin and plasmin‐dependent MMP activities, and, thus, help expedite wound healing. In contrast to this scenario, under pathologic conditions, excessive PAI‐1 contributes to excessive accumulation of collagen and other ECM protein in the wound area, and thus preserves scarring. While the level of PAI‐1 is significantly elevated in fibrotic tissues, lack of PAI‐1 protects different organs from fibrosis in response to injury‐related profibrotic signals. Thus, PAI‐1 is implicated in the pathology of fibrosis in different organs including the heart, lung, kidney, liver, and skin. Paradoxically, PAI‐1 deficiency promotes spontaneous cardiac‐selective fibrosis. In this review, we discuss the significance of PAI‐1 in the pathogenesis of fibrosis in multiple organs. J. Cell. Physiol. 227: 493–507, 2012. © 2011 Wiley Periodicals, Inc.