Protein Z (PZ) is a vitamin K-dependent plasma protein whose function has been uncertain. The structure of PZ is very similar to that of the coagulation-related factors VII, IX, and X and PC, but PZ differs from these other proteins in that it is not the zymogen of a serine protease. We have shown recently that PZ forms a calcium ion-dependent complex with activated factor X at phospholipid surfaces and that this interaction leads to the inhibition of activated factor X activity through, in part, the action of a previously unidentified plasma protein named PZ-dependent protease inhibitor. Herein, we report that the presence of PZ dampens the coagulation response in human plasma and that concomitant PZ deficiency dramatically increases the severity of the prothrombotic phenotype of factor V_Leiden mice. The results indicate that PZ plays a physiologically important role in the regulation of coagulation.