Plasminogen activation is catalyzed both by tissue-type-(t-PA) and by urokinase-type plasminogen activator (u-PA). This reaction is controlled by plasminogen activator inhibitor type 1 (PAI-1) that is either present in plasma or bound to fibrin, present in a thrombus. We studied the mechanism of in vitro inhibition of both t-PA and u-PA activity by PAI-1 bound to fibrin. It is shown that activation of latent PAI-1 unmasks a specific fibrin-binding site that is distinct from its reactive site. This reactive site of activated PAI-1 bound to fibrin is fully exposed to form complexes with t-PA and u-PA, that are unable to activate plasminogen. Upon complex formation with either one of the plasminogen activators, PAI-1 apparently undergoes a conformational change and loses its affinity for fibrin. Consequently, complexes of u-PA and PAI-1 dissociate from the fibrin matrix and are encountered in the fluid phase. In contrast, t-PA/PAI-1 complexes remain bound to fibrin. By employing recombinant t-PA deletion-mutant proteins, that precisely lack domains involved in fibrin binding, we demonstrate that binding of t-PA/PAI-1 complexes is mediated by both the "finger" (F) and the "kringle-2" (K2) domain of t-PA. A model is proposed that explains inhibition of the fibrinolytic process, at the level of plasminogen activation by t-PA, directed by PAI-1 bound to fibrin. An implication of the proposed model is that t-PA/PAI-1 complexes and free t-PA compete for the same binding sites on fibrin.