Factor VIIIa is a non-covalent heterotrimer of A1, A2, and A3-C1-C2 subunits. Previously, we speculated that the central portion of the A2 subunit, in and around the activated protein C-sensitive bond at Arg562-Gly (Fay, P. J., Smudzin, T.M., and Walker, F.J. (1991) J. Biol. Chem. 266, 20139-20145), is important for macromolecular interactions within the factor Xase enzyme complex. A peptide corresponding to factor VIII residues 558-565, SVDQRGNQ and designated FVIII558-565, was chemically synthesized and inhibited factor Xa generation in a purified system with an apparent KI of 105 microM. Tryptic cleavage of FVIII558-565 eliminated its inhibitory activity, whereas a scrambled sequence version of the peptide possessed < 30% the inhibitory activity of the native version. Overlapping peptides FVIII556-564 and FVIII561-569 were also inhibitory and confirmed the importance of residues in and around the scissile bond for functional factor Xase. Kinetic analysis revealed that peptide-mediated inhibition was non-competitive with respect to factor X. However, increasing factor IXa concentration overcame the observed inhibition. Furthermore, the peptide inhibited the factor IXa-dependent enhancement of factor VIIIa reconstituted from isolated A1/A3-C1-C2 dimer plus A2 subunit. Isolated factor VIII heavy chain (contiguous A1-A2 domains) was cleaved at Arg336 by an equimolar concentration of factor IXa in a reaction that was phospholipid-independent. No proteolysis of the isolated A1 subunit was observed in a similar reaction. These results indicate that the A2 subunit sequence delineated by residues 558-565 contributes to the interaction of cofactor with protease and that this interaction is essential for intrinsic factor Xase activity. Furthermore, that this peptide blocks both factor Xase activity and the capacity of factor IXa to stabilize the labile factor VIIIa heterotrimer suggest that this latter property is of physiologic significance.