Tumor necrosis factor (TNF), a mediator of the inflammatory response, induces tissue factor and decreases the expression of thrombomodulin (TM) on endothelial cells, thus shifting the hemostatic properties of the endothelium. To determine the mechanism of TM downregulation, bovine aortic endothelial cells in culture were treated with TNF (2 nmol/L) and the fate of TM followed. Both surface expressed TM (antigen and activity), and the total TM pool (measured by radioimmunoassay and activity in detergent extracts) dropped to less than or equal to 20% of control values within 12 hours of TNF treatment. TM was not found in an immunologically recognizable form in the supernatants of treated cultures. Chloroquine (greater than or equal to 100 mumol/L) was able to abrogate the TNF effect on the total TM pool but not the effect on surface-expressed TM activity. We conclude that TNF induces the internalization and subsequent degradation of the TM molecule. None of the components of the protein C anticoagulant pathway, either alone or in combination, prevented the TNF-dependent downregulation of TM antigen.