Tissue regeneration during wound healing or cancer growth and progression depends on the establishment of a cellular microenvironment. Mesenchymal stem cells (MSC) are part of this cellular microenvironment, where they functionally modulate cell homing, angiogenesis, and immune modulation. MSC recruitment involves detachment of these cells from their niche, and finally MSC migration into their preferred niches; the wounded area, the tumor bed, and the BM, just to name a few. During this recruitment phase, focal proteolysis disrupts the extracellular matrix (ECM) architecture, breaks cell-matrix interactions with receptors, and integrins, and causes the release of bioactive fragments from ECM molecules. MSC produce a broad array of proteases, promoting remodeling of the surrounding ECM through proteolytic mechanisms. The fibrinolytic system, with its main player plasmin, plays a crucial role in cell migration, growth factor bioavailability, and the regulation of other protease systems during inflammation, tissue regeneration, and cancer. Key components of the fibrinolytic cascade, including the urokinase plasminogen activator receptor (uPAR) and plasminogen activator inhibitor-1 (PAI-1), are expressed in MSC. This review will introduce general functional properties of the fibrinolytic system, which go beyond its known function of fibrin clot dissolution (fibrinolysis). We will focus on the role of the fibrinolytic system for MSC biology, summarizing our current understanding of the role of the fibrinolytic system for MSC recruitment and the functional consequences for tissue regeneration and cancer. Aspects of MSC origin, maintenance, and the mechanisms by which these cells contribute to altered protease activity in the microenvironment under normal and pathological conditions will also be discussed.