Malaria is still the world’s most important parasitic disease and is responsible for the death of more people than any other communicable disease except tuberculosis. According to WHO estimates, 300–500 million people are infected with malaria every year. Deaths occur mostly among young children in Africa. Cerebral malaria (CM) is the most severe complication and accounts for up to 80% of fatal cases of Plasmodium falciparum malaria. The mechanisms of malaria and CM pathogenesis remain the subject of continuing debate. It is believed that hemostatic alterations could be of importance in the disease since P. falciparum malaria has been associated with thrombocytopenia and hemostatic alterations (pro-coagulant state), by an unknown mechanism. Here we demonstrate that P. falciparum-infected red blood cells (IRBC) induce Tissue Factor (TF) expression by endothelial cells in culture, in a parasitemia- and time-dependent manner. Tissue Factor was consistently detected by functional (Factor Xa formation), antigen (ELISA), and RT-PCR. Remarkably, only mid-late but not early trophozoites and ring stage parasites were capable of inducing TF expression. These findings are compatible with post-mortem brain biopsies where sequestration is composed mostly by late-stage trophozoites. Our experiments also demonstrate that late-stage IRBC support the assembly of the prothrombinase complex in the presence of FVa, FXa, prothrombin and Ca2+ with thrombin formation. IRBC also support the intrinsic Xnase assembly in the presence of FIXa, FVIIIa, FX and Ca2+ with generation of FXa. It is concluded that IRBC manipulates the hemostatic system by initiating the blood coagulation cascade through induction of TF expression by endothelial cells, leading to FXa production. FXa and other components of the prothrombinase complex assemble in the IRBC allowing the coagulation cascade to propagate, with thrombin formation. Thrombin, FXa and FVIIa may also activate the pro-inflammatory PAR receptors in endothelial cells creating a unique inflammatory environment in the vessels where sequestration has occurred. These finding introduces the concept that malaria is an inflammatory syndrome triggered by expression of TF and activation of the coagulation cascade. Identification of TF as a critical mediator of malaria may allow investigators to test other therapeutic alternatives targeting TF in the treatment of malaria.