The nature of proteolytic activity in the mouse blastocyst was investigated in vitro using cell monolayers as a substrate. Blastocysts obtained from mice on day 4 of gestation were placed directly on various types of cell monolayers. The embryos had hatched at 34 hrs, attached at 45 hrs, and at 56 hrs of culture they formed trophoblast outgrowths by displacing the underlying monolayer cells. Because blastocysts developed equally well on all types of cell monolayers tested, a decidual cell monolayer was used in all the following experiments. The plasminogen activator activity in blastocysts was examined using the fibrin-agar overlay assay. There was a strong relationship between the levels of activity and the extent of trophoblast outgrowth. At the hatching stage, 20% of the embryos showed fibrinolysis, whereas 86% showed clear fibrinolysis at the trophoblast outgrowth stage. After the loss of invasiveness, only 32% of them showed fibrinolysis. Lysed zones surrounding trophoblast always extended beyond the area which displaced the previously occupied cell monolayer. We never observed a clear zone (halo) between the trophoblast and monolayer cells nor cytolytic activity inside the fibrinolytic zone until the embryos had lost their invasive nature.