The protein C anticoagulant pathway is critical for controlling microvascular thrombosis and is initiated when thrombin binds to thrombomodulin (TM) on the surface of the endothelium. Protein C activation is augmented by an endothelial cell protein C receptor (EPCR). EPCR is shed from the vasculature by inflammatory mediators and thrombin. EPCR binds to activated neutrophils in a process that involves proteinase 3 and Mac-1 and appears to inhibit leukocyte extravasation. EPCR can undergo translocation from the plasma membrane to the nucleus where it re-directs gene expression. During translocation, EPCR can carry activated protein C (APC) to the nucleus, possibly accounting for the ability of APC to modulate inflammatory mediator responses in the endothelium. TNF-α and other inflammatory mediators can down-regulate EPCR and TM. Inhibition of protein C pathway function increases cytokine elaboration, endothelial cell injury and leukocyte extravasation in response to endotoxin and infusion of APC reverses these processes. In vitro, APC has been reported to inhibit TNF-α elaboration from monocytes and to block leukocyte adhesion to selectins. Since thrombin can elicit many inflammatory responses in microvascular endothelium, loss of control of microvascular thrombin generation due to impaired protein C pathway function probably contributes to microvascular dysfunction in sepsis.