Human thrombomodulin significantly inhibited the rate of prothrombin conversion to thrombin by Factor Xa in the presence of phospholipid or platelets, calcium, and Factor Va. Sodium dodecyl sulfate polyacrylamide gel electrophoresis of 125I-prothrombin activation revealed that thrombomodulin reduced the rate of prothrombin activation but did not alter the cleavage pattern. The inhibition was reversed by the inclusion of a highly specific rabbit antithrombomodulin antibody. If thrombomodulin was replaced by hirudin, the rate of thrombin generation was not decreased excluding the possibility that the inhibition by thrombomodulin was secondary to the binding of small amounts of thrombin formed early in the reaction and the prevention of feedback breakdown of prothrombin by thrombin. The inhibitory activity of thrombomodulin was overcome by increasing the concentration of Factor Xa and specific, saturable binding of thrombomodulin to Factor Xa was demonstrated. These results indicate that thrombomodulin binds to Factor Xa and thereby inhibits the activity of the prothrombinase complex.