The plasminogen activator (PA)/plasmin system is thought to be involved in processes such as tumor invasion and wound healing, during which epithelial and mesenchymal cells come close together. However, information on regulation of the PA/plasmin system during epithelial-mesenchymal interactions is scarce. Therefore, we examined the in vitro modulation of the production and activity of the components of the PA/plasmin system in squamous carcinoma cells (SCC-4) and normal human keratinocytes in relation to cell density and the presence or absence of fibroblasts (3T3 cells). There was an inverse relation between cell density and mRNA expression for urokinase-type plasminogen activator (u-PA) and u-PA receptor in both SCC-4 cells and keratinocytes. In addition, such a relation was found for plasminogen activator inhibitor types 1 (PAI-1) and 2 (PAI-2) in SCC-4 monocultures, but not in keratinocyte monocultures. In contrast to monocultures, variation of cell density did not affect the mRNA expression of the components of the PA/plasmin system in cocultures of SCC-4 cells or keratinocytes with 3T3 cells. However, the relative expression of mRNAs in co-cultures was clearly different from that in monocultures, especially at low cell density. For most of the components of the PA/plasmin system, a decrease in mRNA expression and u-PA receptor protein was observed at most cell densities, whereas for PAI-1 only in keratinocytes a marked increase was documented. Zymography of supernatants revealed that the levels of both free u-PA and PA-PAI were increased in SCC-4/3T3 co-cultures, whereas in keratinocytes/3T3 co-cultures, only levels of the PA-PAI complex were increased, while the amount of free u-PA activity decreased. This occurred despite the increase u-PA immunoreactivity and was probably caused by the markedly elevated levels of immunoreactive PAI-1. The results of the present study reveal that the production and synthesis of various components of the PA/plasmin system in keratinocytes and SCC-4 cells depend on the density of epithelial cells and are modulated by fibroblasts, probably through a direct cell-cell or cell-matrix contact. Fibroblast-induced modulations are similar in keratinocytes and SCC-4 cells except for the regulation of PAI-1, which is markedly enhanced only in keratinocytes. This suggests that the modulation of PA activity in the direct microenvironment may be different under physiologic and pathologic conditions.