To examine normal human corneal epithelium in vivo and in vitro for expression and status of plasniinogcn activ:ltor inhibitor type 2 (PAI-2). Normal hiuman corneas were prepared for frozen sections and for culture of corneal keratinocytes. PAI-2 was analyzed by immunohistochemistry and western blot analysis uising antibodies that recognize all forms of PAI-2. In vivo and in vitro, PAI-2 was immunohistochemically localized to the superficial corneal keratinocytes. Immunostaining also revealed the presence of PAI-2 in its relaxed (i.e., cleaved) conformation. In vivo, the staining pattern of the relaxed form was identical with that of total PAI-2, but in vitro the relaxed form was detected in a smaller subpopulation of superficial cells. In vitro, the staining pattern indicated a cytoplasmic localization for PAI-2. Western blot analysis revealed that most of the PAI-2 was cell associated and functionally active. The present results are the first to show that PAI-2 is found in normal human corneal epithelium in vivo and in vitro, where it can be considered as a differentiation product. At least in vitro, all detectable PAI-2 is cell associated, with a cytoplasmic distribution. A subpopulation of keratinocytes also contains PAI-2 in its relaxed (i.e., cleaved) conformation. Cleavage by an as yet unidentified cytoplasmic proteinase may constitute a crucial aspect of the function of corneal epithelial PAI-2, which may be relevant to terminal differentiation and death of the corneal keratinocyte.