The protein C anticoagulant pathway converts the coagulation signal generated by thrombin into an anticoagulant response through the activation of protein C by the thrombin-thrombomodulin (TM) complex. The activated protein C (APC) thus formed interacts with protein S to inactivate two critical coagulation cofactors, factors Va and VIIIa, thereby dampening further thrombin generation. The proposed mechanisms by which TM switches the specificity of thrombin include conformational changes in thrombin, blocking access of normal substrates to thrombin and providing a binding site for protein C. The function of protein S appears to be to alter the cleavage site preferences of APC in factor Va, probably by changing the distance of the active site of APC relative to the membrane surface. The clinical relevance of this pathway is now established through the identification of deficient individuals with severe thrombotic complications and through the analysis of families with partial deficiencies in these components and an increased thrombotic tendency. One possible reason that even partial deficiencies are a thrombotic risk is that the function of the pathway can be down-regulated by inflammatory mediators. For instance, clinical studies have shown that the extent to which protein C levels decrease in patients with septic shock is predictive of a negative outcome. Initial clinical studies suggest that supplementation with protein C may be useful in the treatment of acute inflammatory diseases such as sepsis.