Thrombomodulin is an essential cofactor for the activation of the anticoagulant protein C by thrombin. We have identified the expression of thrombomodulin messenger RNA (mRNA) and protein in peripheral blood monocytes. While untreated monocytes expressed thrombomodulin mRNA by Northern blot analysis, lipopolysaccharide-treated cells had decreased mRNA expression. Thrombomodulin antigen was shown in the cytoplasm and on the surface of monocytes by immunohistochemical staining, and thrombomodulin activity was shown on the surface of intact monocytes. One population of synovial lining cells that normally expressed mononuclear phagocyte antigens also expressed thrombomodulin in both noninflamed osteoarthritic synovium and in inflamed rheumatoid arthritis synovium. However, these cells did not express another endothelial protein, von Willebrand factor. We conclude that both circulating and tissue mononuclear phagocytes are capable of expressing thrombomodulin.