The endothelial cell membrane glycoprotein thrombomodulin (TM) plays a critical role in the regulation of coagulation. TM is an essential cofactor in protein C activation by thrombin, and a direct inhibitor of thrombin-induced platelet activation and fibrinogen clotting. Protease nexin-1 (PN-1) is a serpin synthesized and secreted by a variety of cells including endothelial cells. PN-1 bound to the cell surface through interactions with glycosaminoglycans, is an efficient inhibitor of thrombin and controls thrombin-induced cell responses. An investigation of the interaction of PN-1 with TM using purified proteins and cultured human aortic endothelial cells was performed. Purified PN-1 was observed to bind to purified TM in a concentration-dependent manner. Double immunofluorescence studies indicated that PN-1 and TM were colocalized at the endothelial cell surface from which they were coprecipitated. Pretreatment of the cells with chondroitinase ABC greatly decreased the amount of the PN-1 associated to TM at the cell surface demonstrating the involvement of the TM chondroitin-sulfate chain in the formation of complexes. The inhibitory activity of the PN-1/TM complexes on the catalytic activity of thrombin, and on thrombin-induced fibrinogen clotting, was markedly enhanced when compared with the inhibitory activity of each partner. PN-1–overexpressing human aortic endothelial cells and PN-1–underexpressing human aortic endothelial cells exhibited respectively a significantly reduced ability and enhanced capacity to activate protein C. Furthermore, PN-1 decreased the cofactor activity of TM on thrombin activable fibrinolysis inhibitor activation by thrombin. These data show for the first time that PN-1 forms complexes with TM and modulates its anticoagulant activity.