Protein S (PS) enhances the inhibition of factor Xa (FXa) by tissue factor pathway inhibitor-α (TFPI-α) in the presence of Ca²⁺ and phospholipids. Altered forms of recombinant TFPI-α were used to determine the structures within TFPI-α that may be involved in this PS-dependent effect. Wild-type TFPI-α (TFPI_WT), TFPI-α lacking the K3 domain (TFPI-_ΔK3), and TFPI-α containing a single amino acid change at the putative P1 residue of K3 (R199L, TFPI_K3P1) produced equivalent FXa inhibition in the absence of PS, whereas the response in FXa inhibition produced by PS was reduced with TFPI_K3P1 (EC₅₀ 61.8 ± 13.4nM vs 8.0 ± 0.4nM for TFPI_WT) and not detectable with TFPI-_ΔK3. Ligand blotting and surface plasmon resonance experiments demonstrated that FXa bound TFPI_WT and TFPI-_ΔK3 but not the isolated K3 domain, whereas PS bound TFPI_WT and the K3 domain but not TFPI-_ΔK3. Addition of TFPI_WT, TFPI_K3P1, or TFPI-_ΔK3 produced comparable prolongation of FXa-induced coagulation in PS-deficient plasma, but the anticoagulant effect of TFPI_WT was substantially greater than that of TFPI_K3P1 > TFPI-_ΔK3 in normal plasma and PS-deficient plasma reconstituted with PS. We conclude that the PS-mediated enhancement of FXa inhibition by TFPI-α involves an interaction between PS and TFPI-α, which requires the K3 domain of TFPI-α.