Thrombomodulin (TM) is a membrane protein mainly expressed by endothelial cells. It is part of the anticoagulant protein C system but recently several effects were discovered which occur independently of protein C activation. TM binds thrombin and promotes the cleavage of protein C and the thrombin activatable fibrinolysis inhibitor (TAFI), thereby inhibiting coagulation and fibrinolysis. Additionally, it interferes with inflammation, stabilizes barrier function, and increases blood flow under pathological conditions. Recombinant soluble TM protects against tissue damage and partially restores normal function after ischemia in several organs. Recently, it was shown to reduce the infarct size in stroke models. Compared to other anticoagulant compounds the risk of bleeding seems to be smaller in animals and humans treated with soluble TM. With its multiple actions TM represents a new candidate for stroke treatment. In this review we focus on the effects of TM in coagulation, inflammation, and on its protective roles in the prevention of ischemic brain damage.