In stratified squamous epithelia a critical balance among cell proliferation, differentiation, and death must be maintained in order for these tissues to fulfill their barrier function. Previous studies have demonstrated that plasminogen activator inhibitor 2 (PAI-2) is a product of differentiating epidermal keratinocytes, suggesting a role for this inhibitor during squamous differentiation. Furthermore, in certain tumor cell lines, over-expression of PAI-2 confers resistance to the induction of programmed cell death, suggesting cytoprotective function(s). In the present study we demonstrate that PAI-2 mRNA and protein are constitutively and uniquely expressed in differentiating cells of murine stratified squamouS epithelia, including epidermis, esophagus, vagina, oral mucosa, and tongue. PAI-2 immunohistochemical localization patterns suggest a predominantly cytosolic distribution, consistent with biochemical identification of the major:PAI-2 species as a 43-kDa, presumably non-glycosylated protein. Functional analysis shows that the majority of epithelial PAI-2 is active. In contrast to the high levels of PAI-2 expression in stratified squamous epithelia, little or no PAI-2 is detectable in simple epithelia. These findings suggest that epithelial PAI-2 may mediate inhibition of intracellular proteinases associated with events during terminal differentiation and death that are unique to stratified squamous epithelia.