Blood clotting is initiated by the two-subunit enzyme consisting of the plasma protease, factor VIIa (the catalytic subunit), bound to the integral membrane protein, tissue factor (the regulatory subunit). Molecular dynamics simulations have predicted that certain residues in the tissue factor ectodomain interact with phosphatidylserine headgroups to ensure optimal positioning of the tissue factor/factor VIIa complex relative to its membrane-bound protein substrates, factors IX and X. In this study, we individually mutated to alanine all the putative phosphatidylserine-interactive residues in the tissue factor ectodomain and measured their effects on tissue factor cofactor function (activation of factors IX and X by tissue factor/factor VIIa, and clotting of plasma). Some tissue factor mutants exhibited decreased activity in all three assays, with the most profound defects observed from mutations in or near the flexible loop from Lys159 to Gly164. The decreased activity of all of these tissue factor mutants could be partially or completely overcome by increasing the phosphatidylserine content of tissue factor-liposomes. Additionally, yeast surface display was used to screen a random library of tissue factor mutants for enhanced factor VIIa binding. Surprisingly, mutations at a single amino acid (Lys165) predominated, with the Lys165→Glu mutant exhibiting a 3-fold enhancement in factor VIIa binding affinity. Our studies reveal the functional contributions of residues in the C-terminal half of the tissue factor ectodomain that are implicated in interacting with phosphatidylserine headgroups to enhance tissue factor cofactor activity, possibly by allosterically modulating the conformation of the adjacent substrate-binding exosite region of tissue factor.