We have studied the production of plasminogen activator (PA) by mononuclear phagocytes derived from mouse bone marrow precursor cells (CFU-C) in culture. Bone marrow-derived macrophages (BMDM) obtained after 6-8-d cultivation in a liquid medium containing L-cell-conditioned medium (LCM), a source of colony stimulating factor (CSF), showed a high level of fibrinolytic activity comparable to that of thioglycollate medium-induced peritoneal macrophages (TPM) and at least 20-fold higher than that of resident peritoneal macrophages (RPM). Fibrinolysis was a result of active secretion of PA into the culture medium and plaques of caseinolysis could be detected by an overlay assay over all macrophage colonies formed after cloning of bone marrow cells in culture. When the fibrinolytic activity of BMDM harvested at different times was investigated, it was found that the level of PA activity of a given BMDM population correlated well with the incidence of cells (5-15 percent) able to proliferate and form colonies in agar after 7-14 d, somewhat more slowly than CFU-C. This correlation between the level of PA secretion and the incidence of agar colony-forming cells was also found with other mononuclear phagocyte populations. Active fibrinolysis and slow growing colony-forming cells were observed at the same time as adherent macrophages appeared, 2-3 d after the start of bone marrow culture, they persisted for 10 d before declining. Some of the factors which influenced PA production by BMDM were examined. Fibrinolysis could be enhanced two- to fourfold by exposing the cells for 4 h to concanavalin A (Con A), to medium conditioned by Con A-stimulated spleen cells and to LCM, but not by phagocytosis of latex particles. The substance in LCM that stimulated PA production appeared to be identical to CSF. Mononuclear phagocyte targets differed in their response to LCM, which stimulated fibrinolysis readily in BMDM, to a lesser extent in TPM and not at all in RPM. We conclude that CSF stimulates both proliferation and fibrinolytic activity in BMDM and that the level of macrophage activation, as defined by PA production, can be further enhanced by lymphokines. Induction of PA in BMDM provides a rapid and sensitive assay for measuring the activity of CSF and defining its role in macrophage activation.