Protein S, a vitamin K-dependent plasma protein having Gla-residues, increases the rate of inactivation of Factor Va by activated protein C by enhancing the binding of activated protein C to phospholipid [Walker, J.F. (1981) J. Biol. Chem. 256, 11128-11131]. The present study aimed at elucidating the effect of thrombin-modified protein S on Factor Va inactivation by activated protein C. Nondigested protein S consisted 81% of intact form and 19% of modified form, and thrombin-digested protein S had 96% modified form. Protein S, both nondigested and digested, did not show any effects on the amidolytic activity of activated protein C towards synthetic peptide substrate. Nondigested protein S stimulated the Factor Va inactivation by activated protein C, whereas the digested protein appeared to suppress the inactivation. Protein-phospholipid binding experiments showed that although nondigested protein S enhanced the binding of activated protein C to phospholipid stoichiometrically, digested protein S appeared to not only suppress the complex formation, but also dissociate the complex. This evidence suggested that protein S modified by thrombin regulates the action of activated protein C towards Factor Va on phospholipid.