Thrombin has been shown to cleave the vitamin K dependent cofactor protein S with subsequent loss of its cofactor activity. This study examines the control mechanisms for thrombin cleavage of protein S. The anticoagulant activity of activated protein C (APC) is enhanced fourteen fold by the addition of protein S. Thrombin cleaved protein S is seven fold less efficient than the native protein, and this loss of activity is due to reduced affinity of cleaved protein S for APC or the lipid surface compared to the intact protein. In the absence of Ca++, protein S is very sensitive to minimal concentrations of thrombin. As little as 1.5 nM thrombin results in complete cleavage of 20 nM protein S in 10 min and loss of cofactor activity. Ca++, in concentrations greater than 0.5 mM, will inhibit this cleavage and in the presence of physiological Ca++ concentrations, no cleavage of protein S could be demonstrated in spite of high concentrations of thrombin (up to 1 microM) and prolonged incubations (up to two hours). The endothelial surface protein thrombomodulin is very efficient in inhibiting the cleavage of protein S by thrombin suggesting that any thrombin formed on the endothelial cell surface is unlikely to cleave protein S, thus allowing the intact protein to act as a cofactor to APC. We conclude that the inhibitory effects of Ca++ and thrombomodulin on thrombin mediated cleavage of protein S imply that this event, by itself, is unlikely to represent a physiological control of the activity of protein S.