Hepatocyte　growth　factor　activator　inhibitor　1　(HAI-1)　is　a　membrane-bound　multidomain　protein　essential　to　the　integrity　of　the　basement　membrane　during　placental　development　and　is　also　important　in　maintaining　postnatal　homeostasis　in　many　tissues.　HAI-1　is　a　Kunitz-type　serine　protease　inhibitor,　and　soluble　fragments　of　HAI-1　with　variable　lengths　have　been　identified　in　vivo.　The　full-length　extracellular　portion　of　HAI-1　(sHAI-1)　shows　weaker　inhibitory　activity　toward　target　proteases　than　the　smaller　fragments,　suggesting　auto-inhibition　of　HAI-1.　However,　this　possible　regulatory　mechanism　has　not　yet　been　evaluated.　Here,　we　solved　the　crystal　structure　of　sHAI-1　and　determined　the　solution　structure　by　small-angle　X-ray　scattering.　These　structural　analyses　revealed　that,　despite　the　presence　of　long　linkers,　sHAI-1　exists　in　a　compact　conformation　in　which　sHAI-1　active　sites　in　Kunitz　domain　1　are　sterically　blocked　by　neighboring　structural　elements.　Wealso　found　that　in　the　presence　of　target　proteases,　sHAI-1　adopts　an　extended　conformation　that　disables　the　auto-inhibition　effect.　Our　results　also　reveal　the　roles　of　non-inhibitory　domains　of　this　multidomain　protein　and　explain　the　low　activity　of　the　full-length　protein.　The　structural　insights　gained　here　improve　our　understanding　of　the　regulation　of　HAI-1　inhibitory　activities　and　point　to　new　approaches　for　better　controlling　these　activities.