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Chicken embryo fibroblasts (CEF) transformed by Rous sarcoma virus (RSV) exhibit increases in both a cell-associated and a secreted form of plasminogen activator (PA). The mechanism whereby the membrane-bound, cell-associated form of PA is processed to an extracellular, soluble form has been examined in cultures of chicken fibroblasts transformed by a temperature-sensitive mutant of RSV. We report that chymostatin, a protease inhibitor of limited specificity, inhibits the release of PA from tsRSVCEF while causing accumulation of cell-associated PA. Chymostatin's effect on PA release is specific, reversible and appears to be due to its anti-proteolytic capacity. Chymostatin does not inhibit cellular protein synthesis or interfere in the assay used to measure PA. A chymostatin-sensitive protease activity has been found in a membrane fraction isolated from tsRSVCEF.