The activation of latent transforming growth factor-beta (TGF-beta) by vascular endothelial cells (ECs) is regulated by cellular plasminogen activator (PA)/plasmin, transglutaminase (TGase), and latent TGF-beta levels. Because lipopolysaccharide (LPS) has been reported to reduce EC surface plasmin levels by increasing the production of the inhibitor of PA, PA inhibitor-1 (PAI-1), we have tested whether LPS might suppress latent TGF-beta activation in ECs using two different systems, namely, bovine aortic ECs (BAECs) cocultured with smooth muscle cells (SMCs) and BAECs treated with retinol. BAECs were either cocultured with SMCs after treatment with 15 ng/ml LPS or were treated with 2 microM retinol and/or 10 ng/ml LPS, and the expression of PA, surface plasmin, TGase, and the amounts of active and latent TGF-beta secreted into the culture medium were measured. The downregulation of surface PA/plasmin levels with LPS was accompanied by a profound decline of both TGase and latent TGF-beta expression as well as the suppression of surface activation of latent TGF-beta. The effect was dependent on the concentration of LPS and on treatment time. The formation of TGF-beta did not occur in cells maintained in LPS-contaminated culture medium.