Plasminogen activator inhibitor-1 (PAI-1) is a multifunctional glycoprotein that plays a critical role in the pathogenesis of chronic kidney and cardiovascular diseases. Although transforming growth factor (TGF)-beta1 is a known inducer of PAI-1, how it controls PAI-1 expression remains enigmatic. Here we investigated the mechanism underlying TGF-beta1 regulation of PAI-1 in kidney tubular epithelial cells (HKC-8). Surprisingly, overexpression of Smad2 or Smad3 in HKC-8 cells blocked PAI-1 induction by TGF-beta1, whereas knockdown of them sensitized the cells to TGF-beta1 stimulation, suggesting that Smad signaling is not responsible for PAI-1 induction. Blockade of several TGF-beta1 downstream pathways such as p38 MAPK or JNK, but not phosphatidylinositol 3-kinase/Akt and ERK1/2, only partially inhibited PAI-1 expression. TGF-beta1 stimulated beta-catenin activation in tubular epithelial cells, and ectopic expression of beta-catenin induced PAI-1 expression, whereas inhibition of beta-catenin abolished its induction. A functional T cell factor/lymphoid enhancer-binding factor-binding site was identified in the promoter region of the PAI-1 gene, which interacted with T cell factor upon beta-catenin activation. Deletion or site-directed mutation of this site abolished PAI-1 response to beta-catenin or TGF-beta1 stimulation. Similarly, ectopic expression of Wnt1 also activated PAI-1 expression and promoter activity. In vivo, PAI-1 was induced in kidney tubular epithelia in obstructive nephropathy. Delivery of Wnt1 gene activated beta-catenin and promoted PAI-1 expression after obstructive injury, whereas blockade of Wnt/beta-catenin signaling by Dickkopf-1 gene inhibited PAI-1 induction. Collectively, these studies identify PAI-1 as a direct downstream target of Wnt/beta-catenin signaling and demonstrate that PAI-1 induction could play a role in mediating the fibrogenic action of this signaling.