Protein S (PS) has an established role as an important cofactor to activated protein C (APC) in the degradation of coagulation cofactors Va and VIIIa. This anticoagulant role is evident from the consequences of its deficiency, when there is an increased risk of venous thromboembolism. In human plasma, PS circulates approximately 40% as free PS (FPS) and 60% in complex with C4b-binding protein (C4BP). Formation of this complex results in loss of PS cofactor function, and C4BP can then modulate the anticoagulant activity of APC. It had long been predicted that the complex could act as a bridge between coagulation and inflammation due to the involvement of C4BP in regulating complement activation. This prediction was recently supported by the demonstration of binding of the PS-C4BP complex to apoptotic cells. This review aims to summarize recent findings on the structure and functions of PS, the basis and importance of its deficiency, its interaction with C4BP, and the possible physiologic and pathologic importance of the PS-C4BP interaction.