A novel class of small molecule inhibitors for plasminogen activator inhibitor type 1 (PAI-1), represented by AZ3976, was identified in a high throughput screening campaign. AZ3976 displayed an IC(50) value of 26 μm in an enzymatic chromogenic assay. In a plasma clot lysis assay, the compound was active with an IC(50) of 16 μm. Surprisingly, AZ3976 did not bind to active PAI-1 but bound to latent PAI-1 with a K(D) of 0.29 μm at 35 °C and a binding stoichiometry of 0.94, as measured by isothermal calorimetry. Reversible binding was confirmed by surface plasmon resonance direct binding experiments. The x-ray structure of AZ3976 in complex with latent PAI-1 was determined at 2.4 Å resolution. The inhibitor was bound in the flexible joint region with the entrance to the cavity located between α-helix D and β-strand 2A. A set of surface plasmon resonance experiments revealed that AZ3976 inhibited PAI-1 by enhancing the latency transition of active PAI-1. Because AZ3976 only had measurable affinity for latent PAI-1, we propose that its mechanism of inhibition is based on binding to a small fraction in equilibrium with active PAI-1, a latent-like prelatent form, from which latent PAI-1 is then generated more rapidly. This mode of action, with induced accelerated latency transition of active PAI-1 may, together with supporting x-ray data, provide improved opportunities for small molecule drug design in the hunt for therapeutically useful PAI-1 inhibitors.