Inhibition of thrombin by heparin cofactor II (HCII) is accelerated by dermatan sulfate, heparan sulfate, and heparin. Purified HCII or defibrinated plasma was incubated with washed confluent cell monolayers, 125I-thrombin was added, and the rate of formation of covalent 125I-thrombin-inhibitor complexes was determined by sodium dodecyl sulfate-polyacrylamide gel electrophoresis and autoradiography. Fibroblasts and porcine aortic smooth muscle cells accelerated inhibition of thrombin by HCII 2.3-7.5-fold but had no effect on other thrombin inhibitors in plasma. Human umbilical vein endothelial cells and mouse macrophage-derived cells did not accelerate the thrombin-HCII reaction. IMR-90 normal human fetal lung fibroblasts treated with heparinase or heparitinase accelerated the thrombin-HCII reaction to the same degree as untreated cells. In contrast, treatment with chondroitinase ABC almost totally abolished the ability of these cells to activate HCII while chondroitinase AC had little or no effect, suggesting that dermatan sulfate was responsible for the activity observed. [35S]Sulfate-labeled proteoglycans were isolated from IMR-90 fibroblast monolayers and conditioned medium and fractionated into two peaks on Sepharose CL-2B. The lower Mr proteoglycans contained 74-76% dermatan sulfate and were 11-25 times more active with HCII than the higher Mr proteoglycans which contained 68-97% heparan sulfate. The activity of the lower Mr proteoglycans decreased 70-90% by degradation of the dermatan sulfate component with chondroitinase ABC. These results confirm that dermatan sulfate proteoglycans are primarily responsible for activation of HCII by IMR-90 fibroblasts. We suggest that HCII may inhibit thrombin when plasma is exposed to vascular smooth muscle cells or fibroblasts.