Purpose The potent effects of PAI-1 on tumorigenesis and angiogenesis in various experimental models are complex, complicated and at times contradictory. We determined the therapeutic potential of PAI-1 for inhibiting bladder tumor invasion under conditions that closely mimic the clinical setting. Materials and Methods An orthotopic rat bladder tumor model was established by implanting AY-27 rat transitional carcinoma cells into the bladder lumen of syngeneic Fischer F344 rats. Three weeks after implantation 1 μM PAI-1 was administrated directly into the bladder lumen twice weekly for 2 weeks. Two days after the final treatment tumor size, total bladder weight, tumor stage and angiogenesis were assessed. To assess the uPA axis the levels of active and total uPA, and active and total PAI-1 in tumor extracts were determined 0, 2, 24 and 48 hours after intravesical PAI-1 administration. Results Intravesical PAI-1 bound and inactivated its molecular target, tumor uPA. There was significant inhibition of bladder tumor progression, as manifested by 53%, 37% and 57% reductions in tumor size, total bladder weight and angiogenesis, respectively. Only 22% of PAI-1 treated tumors invaded muscle vs 79% in controls. No PAI-1 toxicity was detected. Conclusions To our knowledge this study is the first to demonstrate that intravesical treatment with PAI-1 significantly inhibits tumor progression in an in vivo model of bladder cancer. Further clinical development is warranted for using PAI-1 directly or in combination with current standards, such as bacillus Calmette-Guerin or interferon.