The serpin plasminogen activator inhibitor-1 (PAI-1) is a specific inhibitor of plasminogen activators and a potential therapeutic target in cancer and cardiovascular diseases. Accordingly, formation of a basis for development of specific PAI-1-inactivating agents is of great interest. One possible inactivation mode for PAI-1 is conversion to the inactive, so-called latent state. We have now screened a phage-displayed peptide library with PAI-1 as bait and isolated a 31-residue cysteine-rich peptide that will be referred to as paionin-4. A recombinant protein consisting of paionin-4 fused to domains 1 and 2 of the phage coat protein g3p caused a 2- to 3-fold increase in the rate of spontaneous inactivation of PAI-1. Paionin-4-D1D2 bound PAI-1 with a K(D) in the high nanomolar range. Using several biochemical and biophysical methods, we demonstrate that paionin-4-D1D2-stimulated inactivation consists of an acceleration of conversion to the latent state. As demonstrated by site-directed mutagenesis and competition with other PAI-1 ligands, the binding site for paionin-4 was localized in the loop between alpha-helix D and beta-strand 2A. We also demonstrate that a latency-inducing monoclonal antibody has an overlapping, but not identical binding site, and accelerates latency transition by another mechanism. Our results show that paionin-4 inactivates PAI-1 by a mechanism clearly different from other peptides, small organochemical compounds, or antibodies, whether they cause inactivation by stimulating latency transition or by other mechanisms, and that the loop between alpha-helix D and beta-strand 2A can be a target for PAI-1 inactivation by different types of compounds.