The fibrinolytic system is composed of a balance between rates of plasminogen activation and fibrin degradation, both of which are finely regulated by spatio-temporal mechanisms. Three distinct inhibitors of the fibrinolytic system that differently regulate these steps are: plasminogen activator inhibitor type-1 (PAI-1), α2-antiplasmin, and thrombin activatable fibrinolysis inhibitor (TAFI). In this review, we focus on the mechanisms by which PAI-1 governs total fibrinolytic activity to provide its essential role in many hemostatic disorders, including fibrinolytic shutdown after trauma. PAI-1 is a member of the serine protease inhibitor superfamily (SERPIN) and inhibits the protease activities of plasminogen activators (PAs) by forming complexes with PAs, thereby regulating fibrinolysis. The major PA in the vasculature is tissue-type PA (tPA) which is secreted from vascular endothelial cells (VECs) as an active single chain form. Since PAI-1 exists in molar excess to tPA in plasma, and forms an inactive complex with high affinity, the amount of free active tPA, as well as its activity in plasma, is simply determined by the balance of the molar concentrations of these two proteins. Further, PAI-1 in plasma facilitates the release of active tPA which is retained on the surface of VECs by forming a tPA-PAI-1 complex that suppresses fibrinolytic potential on VECs. Thus, elevated plasma levels of PAI-1 are directly related to attenuated fibrinolysis and increased risk for thrombosis. Since plasma PAI-1 levels are highly elevated under a variety of pathological conditions, including infection/inflammation, fibrinolytic potential, both in plasma and VECs, are readily suppressed to induce fibrinolytic shutdown. A congenital deficiency of PAI-1 in humans, in turn, leads to life-threatening bleeding. These considerations attest to the fact that PAI-1 is the primary regulator of the initial step of fibrinolysis and governs total fibrinolytic activity.