The protein C anticoagulant system generates an "on demand" physiologic anticoagulant response. The pathway is initiated when thrombin binds to the endothelial cell thrombin binding protein, thrombomodulin. The complex exhibits dramatically altered macromolecular specificity. It rapidly cleaves the protein C zymogen to form the anticoagulant, activated protein C. Complex formation between thrombin and thrombomodulin also prevents thrombin, the enzyme responsible for clot formation and a potent platelet activator, from being able to clot fibrinogen or to activate platelets. Structural, kinetic, and competition studies suggest that thrombomodulin blocks these clotting reactions by masking the binding sites for fibrinogen and the platelet thrombin receptor. Stimulation of protein C activation appears to occur through conformational changes in the extended binding pocket of thrombin. This prevents repulsive interactions with protein C that exist when the free enzyme attempts to dock with this substrate. In addition to protein-protein interactions, thrombomodulin has a covalently associated chondroitin sulfate moiety. Chondroitin sulfate binds to a basic surface on thrombin that is also involved in heparin interaction. The chondroitin sulfate enhances the affinity of thrombin for thrombomodulin approximately 10- to 20-fold, making thrombomodulin a more potent inhibitor of coagulation, altering thrombin's conformation and specificity, and accelerating thrombin inhibition by the serpin, antithrombin. These properties make thrombomodulin a molecular switch ideally suited to trigger an anticoagulant response when too much thrombin is generated. The importance of the system is documented by the clinical observation that patients deficient in protein C often die of massive thrombotic complications that can be reversed or prevented by infusion of protein C.