The Ca(2+)-dependent phospholipid-binding protein annexin II heterotetramer (AIIt) is composed of two copies of annexin II and a p11 dimer. The interaction of the carboxyl-terminal lysine residues of the p11 subunit of AIIt with the lysine-binding kringle domains of plasminogen is believed to play a key role in plasminogen binding and stimulation of the tPA-catalyzed cleavage of plasminogen to plasmin. In the current report, we show that AIIt-stimulated plasminogen activation is regulated by basic carboxypeptidases, in vitro. The incubation of AIIt with a 1/400 molar ratio of carboxypeptidase B for periods as short as 2 min resulted in a significant loss in AIIt-stimulated plasminogen activation. Carboxypeptidase B (CpB) as well as thrombin-activated fibrinolysis inhibitor (TAFIa) and carboxypeptidase N (CpN) rapidly reduced AIIt-stimulated plasminogen activation by 80%. The molar ratio of carboxypeptidase/AIIt for half-maximal inhibition of AIIt was 1/4700, 1/700, and 1/500 for CpB, TAFIa, and CpN, respectively. Treatment of AIIt with carboxypeptidase resulted in loss of both carboxyl-terminal lysine residues from the p11 subunit, which correlated with a decrease in the k(cat) and an increase in the K(m) for plasminogen activation. The data reveal a novel mechanism for the regulation of AIIt-stimulated plasminogen activation.