Activated protein C (APC) is a natural anticoagulant that plays an important role in coagulation homeostasis by inactivating the procoagulation factor Va and VIIIa. In addition to its anticoagulation functions, APC also has cytoprotective effects such as anti‐inflammatory, anti‐apoptotic, and endothelial barrier protection. Recently, a recombinant form of human APC (rhAPC or drotrecogin alfa activated; known commercially as ‘Xigris’) was approved by the US Federal Drug Administration for treatment of severe sepsis associated with a high risk of mortality. Sepsis, also known as systemic inflammatory response syndrome (SIRS) resulting from infection, is a serious medical condition in critical care patients. In sepsis, hyperactive and dysregulated inflammatory responses lead to secretion of pro‐ and anti‐inflammatory cytokines, activation and migration of leucocytes, activation of coagulation, inhibition of fibrinolysis, and increased apoptosis. Although initial hypotheses focused on antithrombotic and profibrinolytic functions of APC in sepsis, other agents with more potent anticoagulation functions were not effective in treating severe sepsis. Furthermore, APC therapy is also associated with the risk of severe bleeding in treated patients. Therefore, the cytoprotective effects, rather than the anticoagulant effect of APC are postulated to be responsible for the therapeutic benefit of APC in the treatment of severe sepsis.