Recent studies stress the importance of antimicrobial peptides in protecting the urinary tract from infection. Previously, we have shown that ribonuclease 7 (RNase 7) is a potent antimicrobial peptide that has a broad-spectrum antimicrobial activity against uropathogenic bacteria. The urothelium of the lower urinary tract and intercalated cells of the kidney produce RNase 7, but regulation of its antimicrobial activity has not been well defined. Here, we characterize the expression of an endogenous inhibitor, ribonuclease inhibitor (RI), in the urinary tract and evaluate its effect on the antimicrobial activity of RNase 7. Using RNA isolated from non-infected human bladder and kidney tissue, quantitative real-time polymerase chain reaction showed that RNH1, the gene encoding RI, is constitutively expressed throughout the urinary tract. With pyelonephritis, RNH1 expression and RI peptide production significantly decrease. Immunostaining localized RI production to the umbrella cells of the bladder and intercalated cells of the renal collecting tubule. In vitro assays showed that RI bound to RNase 7 and suppressed its antimicrobial activity by blocking its ability to bind the cell wall of uropathogenic bacteria. Thus, these results demonstrate a new immunomodulatory role for RI and identified a unique regulatory pathway that may affect how RNase 7 maintains urinary tract sterility.