The pathogenesis of pulmonary fibrosis is thought to involve alveolar epithelial injury that, when successfully repaired, can limit subsequent scarring. The plasminogen system participates in this process with the balance between urokinase-type plasminogen activator (uPA) and plasminogen activator inhibitor-1 (PAI-1) being a critical determinant of the extent of collagen accumulation that follows lung injury. Because the plasminogen system is known to influence the rate of migration of epithelial cells, including keratinocytes and bronchial epithelial cells, we hypothesized that the balance of uPA and PAI-1 would affect the efficiency of alveolar epithelial cell (AEC) wound repair. Using an in vitro model of AEC wounding, we show that the efficiency of repair is adversely affected by a deficiency in uPA or by the exogenous administration of PAI-1. By using PAI-1 variants and AEC from mice transgenically deficient in vitronectin (Vn), we demonstrate that the PAI-1 effect requires its Vn-binding activity. Furthermore, we have found that cell motility is enhanced by the availability of Vn in the matrix and that the AEC-Vn interaction is mediated, in part, by the α_vβ₁ integrin. The significant effect of uPA and PAI-1 on epithelial repair suggests a mechanism by which the plasminogen system may modulate pulmonary fibrosis.