Thrombomodulin is a cofactor protein on vascular endothelial cells that inhibits the procoagulant functions of thrombin and enhances thrombin- catalyzed activation of anticoagulant protein C. Thrombomodulin also accelerates the proteolytic activation of a plasma procarboxypeptidase referred to as thrombin-activable fibrinolysis inhibitor (TAFI). In this study, we describe structures on recombinant membrane-bound thrombomodulin that are required for human TAFI activation. Deletion of the N-terminal lectin-like domain and epidermal growth factor (EGF)-like domains 1 and 2 had no effect on TAFI or protein C activation, whereas deletions including EGF- like domain 3 selectively abolished thrombomodulin cofactor activity for TAFI activation. Provided that thrombomodulin EGF-like domain 3 was present, TAFI competitively inhibited protein C activation catalyzed by the thrombin- thrombomodulin complex. A thrombomodulin construct lacking EGF-like domain 3 functioned normally as a cofactor for protein C activation but was insensitive to inhibition by TAFI. Thus, the anticoagulant and antifibrinolytic cofactor activities of thrombomodulin have distinct structural requirements: protein C binding to the thrombin-thrombomodulin complex requires EGF-like domain 4, whereas TAFI binding also requires EGF- like domain 3.