Recent studies have implicated the protein C pathway in the mechanism of lung and airway remodeling. The effector enzyme of this pathway is activated protein C (APC). Clinical studies have shown that APC generation is decreased in patients with lung injury and airway inflammation and that this decrease is associated with increased collagen deposition in the lung. In line with these findings, low APC activity has been observed in the bronchoalveolar lavage fluid in animal models of lung injury and airway inflammation. Treatment with APC significantly inhibits the development of lung fibrosis in bleomycin-induced lung injury and the development of airway hyperresponsiveness and allergic inflammation in ovalbumin-induced bronchial asthma. APC may protect the lung from fibrosis and airway remodeling by suppressing activation of coagulation, decreasing the secretion of inflammatory cytokines and platelet-derived growth factor, and promoting fibrinolysis. APC inhibits the expression of cytokines by decreasing the nuclear translocation of signal transducer and activator of transcription 6 and the nuclear factor-kappaB family of transcription factors. In view of its multiple functions, APC constitutes a potential therapeutic agent for inflammatory disorders of the lung and airways.