Protein C is a vitamin K-dependent, anti-thrombotic protein that is proteolytically cleaved by thrombin to produce the active serine protease, activated protein C (APC). APC inactivates co-factors Va and VIIIa, leading to down-regulation of thrombin generation. Factor Va requires phosphatidylserine (PS) for full cofactor activity. APC inactivates bovine factor Va by catalyzing cleavage in its heavy-chain at Arg505, Arg 662 and Arg306. The cleavage at Arg 306 is stimulated by PS-containing membranes. In this paper, we use water-soluble 2-dicaproyl-sn-glycero-3-phospho-L-serine (C6PS) to ask whether a membrane or molecular PS regulates inactivation of factor Va by APC. Synthetic substrate titration suggested that APC has two Ca2+-requiring binding sites for C6PS: one site increased the APC amidolytic activity (Kdeff ~ 1.3 μM) while the other site decreased it (Kdeff ~ 2 μM) in the presence of 2 mM Ca2+. The effect of C6PS on APC amidolytic activity was PS-specific, with C6PE having no effect. However, titration of both intrinsic fluorescence and DEGR ([5-(dimethylamino)-l-naphthalenesulfonyl] glutamylycylarginyl chloromethyl )-labeled APC fluorescence showed only one Ca2+-requiring C6PS binding site (Kdeff ~ 0.8 μM). The fluorescence anisotropy of DEGR-APC in the presence of 200 μM C6PS revealed C6PS-dependent 1:1 binding to both factor Va isoforms (Va1or Va2) with Kdeff of 1.13x10-9 M (Va1) and 0.3x10-9 M (Va2). The inactivation of factors Va1/Va2 by APC was also promoted by C6PS. In the presence of 200 μM C6PS to saturate sites on both APC and factor Va, both factors Va1/Va2 were fully inactivated by APC (indicating cleavage at Arg 306). However, in the absence of C6PS or presence of only 4 μM C6PS (sufficient to saturate sites only on APC), only partial inactivation (48–52%) of factor Va1/Va2 was observed. These results suggest that PS binding to APC may have some effect on cleavage at Arg505 or Arg 662 but that PS binding to factor Va was needed to promote cleavage at Arg 306. Supported by USPHS grant HL072827 to BRL.