The binding of plasminogen activator inhibitor-1 (PAI-1) to serine proteinases, such as tissue-type plasminogen activator (tPA) and urokinase-type plasminogen activator (uPA), is mediated by the exosite interactions between the surface-exposed variable region-1, or 37-loop, of the proteinase and the distal reactive center loop (RCL) of PAI-1. Although the contribution of such interactions to the inhibitory activity of PAI-1 has been established, the specific mechanistic steps affected by interactions at the distal RCL remain unknown. We have used protein engineering, stopped-flow fluorimetry, and rapid acid quenching techniques to elucidate the role of exosite interactions in the neutralization of tPA, uPA, and beta-trypsin by PAI-1. Alanine substitutions at the distal P4' (Glu-350) and P5' (Glu-351) residues of PAI-1 reduced the rates of Michaelis complex formation (k(a)) and overall inhibition (k(app)) with tPA by 13.4- and 4.7-fold, respectively, whereas the rate of loop insertion or final acyl-enzyme formation (k(lim)) increased by 3.3-fold. The effects of double mutations on k(a), k(lim), and k(app) were small with uPA and nonexistent with beta-trypsin. We provide the first kinetic evidence that the removal of exosite interactions significantly alters the formation of the noncovalent Michaelis complex, facilitating the release of the primed side of the distal loop from the active-site pocket of tPA and the subsequent insertion of the cleaved reactive center loop into beta-sheet A. Moreover, mutational analysis indicates that the P5' residue contributes more to the mechanism of tPA inhibition, notably by promoting the formation of a final Michaelis complex.