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.