In the initial stages of capillary formation (angiogenesis) microvascular endothelial cells of preexisting blood vessels locally degrade the underlying basal lamina and invade into the stroma of the tissue to be vascularized. A consistent body of experimental evidence has shown that this process requires a wide array of dedradative enzymes. Components of the plasminogen activator (PA)-plasmin system and of the matrix metalloproteinase (MMP) family play important roles. PAs trigger a proteinase cascade that results is the generation of high local concentrations of plasmin and active MMPs. This increase in proteolytic activity has three major consequences: it permits endothelial cell degradation and invasion of the vessel basal lamina, generates extracellular matrix (ECM) degradation products that are chemotactic for endothelial cells, and activates and mobilizes growth factors localized in the ECM. In addition, urokinase-type PA modulates some endothelial cell functions, including proliferation and migration, with a mechanism independent of proteolytic activity. PA and MMP activities are modulated in endothelial cells by complex mechanisms, including transcriptional regulation by a variety of growth factors and cytokines with angiogenic activity, extracellular control of the proteolytic activities by tissue inhibitors, and interaction with binding sites on the cell membrane and ECM.