Factor VII-activating protease (FSAP) is a novel plasma-derived serine protease structurally homologous to tissue-type and urokinase-type plasminogen activators. We demonstrate that plasminogen activator inhibitor-1 (PAI-1), the predominant inhibitor of tissue-type and urokinase-type plasminogen activators in plasma and tissues, is an inhibitor of FSAP as well. We detected PAI-1.FSAP complexes in addition to high levels of extracellular RNA, an important FSAP cofactor, in bronchoalveolar lavage fluids from patients with acute respiratory distress syndrome. Hydrolytic activity of FSAP was inhibited by PAI-1 with a second-order inhibition rate constant (K(a)) of 3.38 +/- 1.12 x 10(5) m(-1).s(-1). Residue Arg(346) was a critical recognition element on PAI-1 for interaction with FSAP. RNA, but not DNA, fragments (>400 nucleotides in length) dramatically enhanced the reactivity of PAI-1 with FSAP, and 4 microg.ml(-1) RNA increased the K(a) to 1.61 +/- 0.94 x 10(6) m(-1).s(-1). RNA also stabilized the active conformation of PAI-1, increasing the half-life for spontaneous conversion of active to latent PAI-1 from 48.4 +/- 8 min to 114.6 +/- 5 min. In contrast, little effect of DNA on PAI-1 stability was apparent. Residues Arg(76) and Lys(80) in PAI-1 were key elements mediating binding of nucleic acids to PAI-1. FSAP-driven inhibition of vascular smooth muscle cell proliferation was antagonized by PAI-1, suggesting functional consequences for the FSAP-PAI-1 interaction. These data indicate that extracellular RNA and PAI-1 can regulate FSAP activity, thereby playing a potentially important role in hemostasis and cell functions under various pathophysiological conditions, such as acute respiratory distress syndrome.