The Endothelial Protein C receptor (EPCR) is essential for the anticoagulant and cytoprotective functions of the Protein C (PC) system. Selected variants of the malaria parasite protein, Plasmodium falciparum Erythrocyte Membrane Protein 1 (PfEMP1) associated with severe malaria, including cerebral malaria, specifically target EPCR on vascular endothelial cells. Here, we examine the cellular response to PfEMP1 engagement to elucidate its role in malaria pathogenesis. Binding of the CIDRα1.1 domain of PfEMP1 to EPCR obstructed activated PC (APC) binding to EPCR and induced a loss of cellular EPCR functions. CIDRα1.1 severely impaired endothelial PC activation and effectively blocked APC-mediated activation of protease-activated receptor-1 (PAR1) and associated barrier protective effects of APC on endothelial cells. A soluble EPCR variant (E86A-sEPCR) bound CIDRα1.1 with high affinity and did not interfere with (A)PC binding to cellular EPCR. E86A-sEPCR used as a decoy to capture PfEMP1, permitted normal PC activation on endothelial cells, normal barrier protective effects of APC, and greatly reduced cytoadhesion of infected erythrocytes to brain endothelial cells. These data imply important contributions of PfEMP1-induced protein C pathway defects in the pathogenesis of severe malaria. Furthermore, the E86A-sEPCR decoy provides a proof-of-principle strategy for the development of novel adjunct therapies for severe malaria.