The protein C (PC) pathway plays an important role in vascular function, and acquired deficiency during sepsis is associated with increased mortality. We have explored the role of PC suppression in modulating early inflammatory events in a model of polymicrobial sepsis. We show that increased levels of organ damage and dysfunction are associated with decreased levels of endogenous PC. Notably, animals with low PC had correspondingly high levels of pulmonary iNOS expression, which correlated with chemokines KC/Gro and MIP2, previously shown to predict outcome in this model. Treatment with activated protein C (aPC) not only reduced the pathology score, leukocyte infiltration and markers of organ dysfunction, but also suppressed the induction of iNOS, and the chemokine response (including KC/Gro, MIP2, IP-10, RANTES, GCP-2 and lymphotactin), and increased apoA1. aPC treatment also suppressed the induction of VEGF, a marker recently suggested to play a pathophysiological role in sepsis. These data demonstrate a clear link between low protein C and degree of organ damage and dysfunction in sepsis, as well as the early reversal with aPC treatment. Moreover, our data show a direct role of aPC in broadly modulating monocyte and T-cell chemokines following systemic inflammatory response.