Extracellular proteolysis is required for matrix degradation and the regulation of cytokine activity during angiogenesis, and this is dependent on a cohort of proteases and protease inhibitors produced by endothelial and nonendothelial cells. The plasminogen activator (PA)/plasmin system has been extensively investigated in these processes, and descriptive studies have demonstrated that urokinase-type PA (uPA), uPA receptor (uPAR) and PA inhibitor-1 (PAI-1) are expressed by endothelial cells during angiogenesis in vivo. In vitro studies have led to the notion that normal capillary morphogenesis is dependent on a protease-antiprotease equilibrium. These findings are discussed in the context of recent observations on uPA-, uPAR-, PAI-1 and plaminogen-deficient mice, in which developmental and physiological angiogenesis appear to occur normally. This has led to a reevaluation of the role of the PA/plasmin system during angiogenesis. In particular, these observations raise the possibility that the role of this system may be limited to situations in which endothelial cells encounter and must degrade fibrin in order to form new capillary sprouts.