Senescence of alveolar type 2 (ATII) cells, progenitors of the alveolar epithelium, is implicated in the pathogeneses of idiopathic pulmonary fibrosis (IPF), an aging-related progressive fatal lung disorder with unknown etiology. The mechanism underlying ATII cell senescence in fibrotic lung diseases, however, remains poorly understood. In this study, we report that ATII cells in IPF lungs express higher levels of serpine 1, also known as plasminogen activator inhibitor 1 (PAI-1), and cell senescence markers p21 and p16, compared to ATII cells in control lungs. Silencing PAI-1 or inhibition of PAI-1 activity in cultured rat ATII (L2) cells leads to decreases in p53 serine 18 phosphorylation (p53S18P ), p53 and p21 protein expressions; an increase in retinoblastoma protein phosphorylation (ppRb); and a reduction in the sensitivity to bleomycin- and doxorubicin-induced senescence. Silencing p53, on the other hand, abrogates PAI-1 protein-stimulated p21 expression and cell senescence. In vivo studies, using ATII cell-specific PAI-1 conditional knockout mouse model generated recently in this laboratory, further support the role of PAI-1 in the activation of p53-p21-Rb cell cycle repression pathway, ATII cell senescence, and lung fibrosis induced by bleomycin. This study reveals a novel function of PAI-1 in regulation of cell cycle and suggests that elevation of PAI-1 contributes importantly to ATII cell senescence in fibrotic lung diseases.