Many advanced human tumors including breast cancer overproduce plasmin that is known to promote angiogenesis and metastasis. The mechanism of this effect is poorly understood. Here we report that annexin II, an endothelial co-receptor for tPA (tissue-type plasminogen activator) and plasminogen, was undetectable in normal and hyperplastic ductal epithelial cells and ductal complexes. By contrast, it was consistently expressed in invasive breast cancer and ductal carcinoma in situ (DCIS) indicating its involvement in breast cancer. Using the well established invasive/metastatic MDA-MB231 cell line and the noninvasive/nonmetastatic MCF-7 human breast cancer cell line, we investigated the mechanism by which annexin II regulates breast cancer progression and metastasis. Western and Northern blot analyses demonstrate selective expression of annexin II in MDA-MB231 cells but not in poorly invasive MCF-7 cells suggesting its participation in invasive breast cancer. Since annexin II is a receptor for plasminogen, we tested whether MDA-MB231 cells are capable of producing plasmin in vitro. MDA-MB231 cell membranes induced plasmin generation in a time-dependent manner while those from MCF-7 cells failed to convert plasminogen to plasmin. The generated plasmin is capable of degrading ECM consequently facilitating cell invasion and migration, biological functions required for angiogenesis and metastasis. Plasmin generation and its dependent invasion and migration can be blocked by a monoclonal antibody to annexin II or angiostatin, potent inhibitors of angiogenesis, breast cancer, and metastasis. Our findings indicate that annexin II-dependent localized plasmin generation by human breast cancer cells could contribute to angiogenesis and metastasis. These results suggest that annexin II may be an attractive target for new anti-angiogenic and anti-breast cancer therapies.