Previous studies demonstrated that tissue plasminogen activator-induced fibrinolysis in vitro is retarded in the presence of prothrombin (II) activation and that the anticoagulant-activated protein C appears profibrinolytic by preventing the formation of thrombin (IIa)-like activity during fibrinolysis. To disclose the molecular connection between the generation of IIa and the inhibition of fibrinolysis, a lysis assay that is sensitive to the antifibrinolytic effect of II activation was developed and was used to purify a 60-kDa single-chain protein from human plasma. Because the lysis of a clot, produced from purified components, is retarded when this protein is present and when II activation occurs in situ, the protein was named TAFI (thrombin-activatable fibrinolysis inhibitor). TAFI is cleaved by IIa yielding 35-, 25-, and 14-kDa products. Amino-terminal sequence analyses identified TAFI as a precursor of a plasma carboxypeptidase B (CPB). Formation of the 35-kDa product correlates with both prolongation of lysis time and CPB-like activity. Prolongation of lysis time saturates at about 125 nM TAFI. Activated TAFI inhibits the activation of Glu-plasminogen but does not prolong the lysis of clots formed in the presence of Lys-plasminogen. 2-Guanidinoethylmercaptosuccinic acid, a competitive inhibitor of CPB, completely inhibits prolongation of lysis by activated TAFI in a purified system and the prolongation induced by II activation in barium-adsorbed plasma. This suggests that TAFI accounts for the antifibrinolytic effect that accompanies prothrombin activation and that activated protein C appears profibrinolytic by attenuating TAFI activation.