The binding of plasminogen activators and plasminogen to the cell surface results in the rapid generation of the serine protease plasmin. Plasmin is further degraded by an autoproteolytic reaction, resulting in the release of an angiostatin, A61 (Lys78-Lys468). Previously, we demonstrated that the annexin A2-S100A10 heterotetramer (AIIt) stimulates the release of A61 from plasmin by promoting the autoproteolytic cleavage of the Lys468-Gly469 bond and reduction of the plasmin Cys462-Cys541 disulfide (Kwon, M., Caplan, J. F., Filipenko, N. R., Choi, K. S., Fitzpatrick, S. L., Zhang, L., and Waisman, D. M. (2002) J. Biol. Chem. 277, 10903-10911). Mechanistically, it was unclear if AIIt promoted a conformational change in plasmin, resulting in contortion of the plasmin disulfide, or directly reduced the plasmin disulfide. In the present study, we show that AIIt thiols are oxidized during the reduction of plasmin disulfides, establishing that AIIt directly participates in the reduction reaction. Incubation of HT1080 cells with plasminogen resulted in the rapid loss of thiol-specific labeling of AIIt by 3-(N-maleimidopropionyl)biocytin. The plasminogen-dependent oxidation of AIIt could be attenuated by thioredoxin. Thioredoxin reductase catalyzed the transfer of electrons from NADPH to the oxidized thioredoxin, thus completing the flow of electrons from NADPH to AIIt. Therefore, we identify AIIt as a substrate of the thioredoxin system and propose a new model for the role of AIIt in the redox-dependent processing of plasminogen and generation of an angiostatin at the cell surface.