Cellular senescence contributes importantly to aging and aging-related diseases, including idiopathic pulmonary fibrosis (IPF). Alveolar epithelial type II (ATII) cells are progenitors of alveolar epithelium, and ATII cell senescence is evident in IPF. Previous studies from this lab have shown that increased expression of plasminogen activator inhibitor 1 (PAI-1), a serine protease inhibitor, promotes ATII cell senescence through inducing p53, a master cell cycle repressor, and activating p53-p21-pRb cell cycle repression pathway. In this study, we further show that PAI-1 binds to proteasome components and inhibits proteasome activity and p53 degradation in human lung epithelial A549 cells and primary mouse ATII cells. This is associated with a senescence phenotype of these cells, manifested as increased p53 and p21 expression, decreased phosphorylated retinoblastoma protein (pRb), and increased senescence-associated beta-galactose (SA-β-gal) activity. Moreover, we find that, although overexpression of wild-type PAI-1 (wtPAI-1) or a secretion-deficient, mature form of PAI-1 (sdPAI-1) alone induces ATII cell senescence (increases SA-β-gal activity), only wtPAI-1 induces p53, suggesting that the premature form of PAI-1 is required for the interaction with the proteasome. In summary, our data indicate that PAI-1 can bind to proteasome components and thus inhibit proteasome activity and p53 degradation in ATII cells. As p53 is a master cell cycle repressor and PAI-1 expression is increased in many senescent cells, the results from this study will have a significant impact not only on ATII cell senescence/lung fibrosis but also on the senescence of other types of cells in different diseases.