Transformed cells produce elevated levels of the urokinase-type plasminogen activator (u-PA), which has been linked with the invasive or migratory phenotype of these cells. The u-PA is secreted and normally maintained in the inactive, single-chain form (scu-PA) and it has been assumed that natural activation occurs via a plasmin-mediated cleavage converting scu-PA to the active, two-chain form (tcu-PA). We now demonstrate that secreted scu-PA in Rous sarcoma virus-transformed chicken embryo fibroblast (RSVCEF) cultures is activated by an endogenous, plasmin-independent mechanism. Normal CEFs and CEFs infected with a temperature-sensitive RSV mutant and incubated at the nonpermissive temperature do not activate scu-PA. Conditioned medium harvested from plasmin-free cultures of RSVCEFs contains active tcu-PA as determined by two independent methods. The scu-PA is progressively converted with time in culture and requires the presence of intact cells or a plasma membrane-enriched fraction. When added to RSVCEF cultures, a synthetic peptide corresponding to residues 20-41 of the growth factor domain of chicken u-PA blocks the conversion to tcu-PA, and scu-PA accumulates in the cultures. These results suggest that scu-PA is secreted by cells, becomes bound to a u-PA receptor, and is proteolytically converted to active tcu-PA by a catalytic mechanism on the surface of RSV-transformed fibroblasts.