Sulfated tyrosine residues within recombinant human factor VIII were identified by [35S]sulfate biosynthetic labeling of Chinese hamster ovary cells which express human recombinant factor VIII. Alkaline hydrolysis of purified [35S]sulfate-labeled factor VIII showed that greater than 95% of the [35S]sulfate was incorporated into tyrosine. [3H]Tyrosine and [35S]sulfate double labeling was used to quantify the presence of 6 mol of tyrosine sulfate per mole of factor VIII. Amino acid sequence analysis of thrombin and tryptic peptides isolated from [35S]sulfate-labeled factor VIII demonstrated tyrosine sulfate at residue 346 in the factor VIII heavy chain and at residues 1664 and 1680 in the factor VIII light chain. In addition, the carboxyl-terminal half of the A2 domain contained three tyrosine sulfate residues, likely at positions 718, 719, and 723. Interestingly, all sites of tyrosine sulfation border thrombin cleavage sites. The functional importance of tyrosine sulfation was examined by treatment of cells expressing factor VIII with sodium chlorate, a potent inhibitor of tyrosine sulfation. Increasing concentrations of sodium chlorate inhibited sulfate incorporation into factor VIII without affecting its synthesis and/or secretion. However, factor VIII secreted in the presence of sodium chlorate exhibited a 5-fold reduction in procoagulant activity, although the protein was susceptible to thrombin cleavage. These results suggest that tyrosine sulfation is required for full factor VIII activity and may affect the interaction of factor VIII with other components of the coagulation cascade.