The gastric pathogen Helicobacter pylori (H. pylori) is linked to peptic ulcer and gastric cancer, but the relevant pathophysiological mechanisms are unclear. We now report that H. pylori stimulates the expression of plasminogen activator inhibitor (PAI)-1, urokinase plasminogen activator (uPA), and its receptor (uPAR) in gastric epithelial cells and the consequences for epithelial cell proliferation. Real-time PCR of biopsies from gastric corpus, but not antrum, showed significantly increased PAI-1, uPA, and uPAR in H. pylori-positive patients. Transfection of primary human gastric epithelial cells with uPA, PAI-1, or uPAR promoters in luciferase reporter constructs revealed expression of all three in H+/K+ATPase- and vesicular monoamine transporter 2-expressing cells; uPA was also expressed in pepsinogen- and uPAR-containing trefoil peptide-1-expressing cells. In each case expression was increased in response to H. pylori and for uPA, but not PAI-1 or uPAR, required the virulence factor CagE. H. pylori also stimulated soluble and cell surface-bound uPA activity, and both were further increased by PAI-1 knockdown, consistent with PAI-1 inhibition of endogenous uPA. H. pylori stimulated epithelial cell proliferation, which was inhibited by uPA immunoneutralization and uPAR knockdown; exogenous uPA also stimulated proliferation that was further increased after PAI-1 knockdown. The proliferative effects of uPA were inhibited by immunoneutralization of the EGF receptor and of heparin-binding EGF (HB-EGF) by the mutant diphtheria toxin CRM197 and an EGF receptor tyrosine kinase inhibitor. H. pylori induction of uPA therefore leads to epithelial proliferation through activation of HB-EGF and is normally inhibited by concomitant induction of PAI-1; treatments directed at inhibition of uPA may slow the progression to gastric cancer.