Serum-free rat hepatocyte cultures can be stimulated to divide by the inactive, single-chain form of hepatocyte growth factor (scHGF), suggesting that hepatocytes contain a protein that can cleave scHGF to its biologically active, two-chain (tcHGF) form. We added radiolabeled scHGF to serum-free cultures and confirmed that tcHGF was being generated. Because scHGF can be cleaved to tcHGF by plasminogen activators (PAs), we next tested the cultures for active PA. Although little PA activity was initially present, the majority was of the urokinase type (u-PA) as determined by neutralization studies using either a polyclonal antibody against u-PA or, since u-PA functions in the context of its receptor (u-PAR), a monoclonal antibody against u-PAR. Considerable PA activity developed within 24 h, which was also neutralizable with antibody. To test whether the active, receptor-bound u-PA from the cell cultures was cleaving scHGF, iodinated scHGF was added to intact cells in the presence of the antibody against up-PAR. Comparison to control cultures determined that the antibody prevented scHGF cleavage. Analysis of cultures treated with HGF, epidermal growth factor, and transforming growth factor α (TGF-α) α showed these growth factors increased the hepatocyte PA activity in parallel with the mRNA for u-PA. TGF-β had the opposite effect, and when TGF-β was added to the culture system, conversion of scHGF to tcHGF was prevented in concert with the production of the type 1 PA inhibitor. When liver remnants from hepatectomized animals were assayed for active TGF-β, elevated protein was found just prior to the appearance of PA inhibitor 1 message and protein. Collectively, our data show that in culture, active u-PA is present and cleaves scHGF to tcHGF in the context of its receptor. It also suggests that modulation of u-PA activity by various growth factors is relevant for regulating cleavage of scHGF to tcHGF both in vitro and in vivo.