Fibrinolytic activity and its relation to morphogenesis was investigated in several transformed murine endothelial cell lines and primary cultures of endothelial cells. Two in vitro systems, fibrin gels and Matrigel (Collaborative Research, Bedford, MA), were used. Fibrin gels model a fibrin-rich extracellular matrix that frequently supports neovascularization in vivo, and Matrigel models the basement membrane surrounding quiescent endothelial cells in vivo. The transformed endothelial cell lines have higher levels of plasminogen activator (PA) mRNA than primary cultures of endothelial cells, and an increased PA-mediated proteolytic activity was correlated with formation of cysts in fibrin gels. Addition of neutralizing anti- urokinase antibodies, plasminogen depletion, or addition of a plasmin inhibitor prevented cyst formation. Addition of plasminogen restored the ability to form cysts in the plasminogen-depleted system. Normal endothelial cells organized into capillary-like structures in fibrin gels regardless of manipulations affecting the fibrinolytic pathway. In Matrigel, both transformed and primary cultures of endothelial cells rapidly formed a capillary-like network that was not affected by plasminogen depletion or addition of plasmin inhibitors. Thus, elements of the fibrinolytic pathway necessary for cyst formation are not critical in capillary-like structure formation on a reconstituted basement membrane. These results suggest that plasmin is essential for hemangioma formation but is not critical to the organizational behavior of normal endothelial cells.