Staphylokinase (Sak), a single-chain protein comprising 136 amino acids with NH2-terminal sequence,SSSFDKGKYKKGDDA forms a complex with plasmin, that is endowed with plasminogen activating properties. Plasmin is presumed to process mature (high molecular weight, HMW) Sak to low molecular weight derivatives (LMW-Sak), primarily by hydrolyzing the Lys10-Lys11 peptide bond, but the kinetics of plasminogen activation by HMW-Sak and LMW-Sak are very similar. Here, the requirement of NH2-terminal proteolysis of Sak for the induction of plasminogen activating potential was studied by mutagenesis of Lys10 and Lys11 in combination with NH2-terminal microsequence analysis of equimolar mixtures of Sak and plasminogen and determination of kinetic parameters of plasminogen activation by catalytic amounts of Sak. Substitution of Lys10 with Arg did not affect processing of the Arg10-Lys11 site nor plasminogen activation, whereas substitution with His resulted in cleavage of the Lys11-Gly12 peptide bond and abolished plasminogen activation. Substitution of Lys11 with Arg did not affect Lys10-Arg11 processing or plasminogen activation, whereas replacement with His did not prevent Lys10-His11 hydrolysis but abolished plasminogen activation. Substitution of Lys11 with Cys yielded an inactive processed derivative which was fully activated by aminoethylation. Deletion of the 10 NH2-terminal amino acids did not affect plasminogen activation, but additional deletion of Lys11 eliminated plasminogen activation. Thus generation of plasminogen activator potential in Sak proceeds via plasmin-mediated removal of the 10 NH2-terminal amino acids with exposure of Lys11 as the new NH2 terminus. This provides a structural basis for the hypothesis, derived from kinetic measurements, that plasminogen activation by Sak needs to be primed by plasmin and a mechanism for the high fibrin selectivity of Sak in a plasma milieu.