Tyrosine sulfate was identified as a constituent of human heparin cofactor II by analysis of sulfate-labeled protein secreted by a human hepatoma-derived cell line and of purified protein from human plasma. Alkaline hydrolysis of heparin cofactor II released tyrosine sulfate as demonstrated by anion-exchange high performance liquid chromatography of hydrolysates. Two sites of sulfation were identified, and the amino acid sequences of the sites were established by sequential Edman degradation of sulfate-containing tryptic peptides that were isolated by reverse-phase high performance liquid chromatography. Each peptide contains only a single tyrosine residue so that the sites of sulfation can be assigned unambiguously. The two sites of sulfation are separated by 13 residues and represent an internal sequence repeat in the heparin cofactor II molecule. The two sites have the following sequences. Glu56-Asp-Asp-Asp-Tyr(SO4)-Leu-Asp62 Glu69-Asp-Asp-Asp-Tyr(SO4)-Ile-Asp75 Sulfate-labeled heparin cofactor II formed a covalent complex with thrombin in a heparin-dependent manner. Thus, the sulfate-containing form of the protein was shown to be biologically active. The characteristic sulfate-containing segment of heparin cofactor II, which contains 17 acidic amino acid residues over a span of 30 residues, may contribute to the unique properties of this thrombin inhibitor.