The generation of the broad specificity serine protease plasmin in the pericellular environment is regulated by binding of the urokinase-type plasminogen activator (uPA) to its specific glycosylphosphatidylinositol (GPI)-anchored cell-surface receptor, uPAR. This interaction potentiates the reciprocal activation of the cell-associated zymogens pro-uPA and plasminogen. To further study the role of uPAR in this mechanism, we have expressed two directly membrane-anchored chimeric forms of uPA, one anchored by a C-terminal GPI-moiety (GPI-uPA), the other with a C-terminal transmembrane peptide (TM-uPA). These were expressed in the monocyte-like cell lines U937 and THP-1, which are excellent models for kinetic and mechanistic studies of cell-surface plasminogen activation. In both cell-lines, GPI-uPA activated cell-associated plasminogen with characteristics both qualitatively and quantitatively indistinguishable from those of uPAR-bound uPA. By contrast, TM-uPA activated cell-associated plasminogen less efficiently. This was due to effects on the K m for plasminogen activation (which was increased up to five-fold) and the efficiency of pro-uPA activation (which was decreased approximately four-fold). These observations suggest that uPAR serves two essential roles in mediating efficient cell-surface plasminogen activation. In addition to confining uPA to the cell-surface, the GPI-anchor plays an important role by increasing accessibility to substrate plasminogen and, thus, enhancing catalysis. However, the data also demonstrate that, in the presence of an alternative mechanism for uPA localization, uPAR is dispensable and, therefore, unlikely to participate in any additional interactions that may be necessary for the efficiency of this proteolytic system. In these experiments zymogen pro-uPA was unexpectedly found to be constitutively activated when expressed in THP-1 cells, suggesting the presence of an alternative plasmin-independent proteolytic activation mechanism in these cells.