Factor VIIIa, the cofactor for the factor IXa-dependent conversion of factor X to factor Xa, is proteolytically inactivated by activated protein C (APC). APC cleaves at two sites in factor VIIIa, Arg336, near the C terminus of the A1 subunit; and Arg562, bisecting the A2 subunit (Fay, P., Smudzin, T., and Walker, F. (1991) J. Biol. Chem. 266, 20139-20145). Factor VIIIa increased the fluorescence anisotropy of fluorescein-Phe-Phe-Arg factor IXa (Fl-FFR-FIXa; Kd = 42.4 nM), whereas cleavage of factor VIIIa by APC eliminated this property. Isolation of the APC-cleaved A1/A3-C1-C2 dimer (A1336/A3-C1-C2), and the fragments derived from cleaved A2 subunit (A2N/A2C), permitted dissection of the roles of individual cleavages in cofactor inactivation. Intact A1/A3-C1-C2 dimer increased Fl-FFR-FIXa anisotropy and bound factor X in a solid phase assay, while these activities were absent in the A1336/A3-C1-C2. However, the residues removed by this cleavage, Met337 Arg372, did not directly participate in these functions since neither a synthetic peptide to this sequence nor an anti-peptide polyclonal antibody blocked these activities using intact dimer. CD spectral analysis of the intact and truncated dimers indicated reduced alpha and/or beta content in the latter. The A1/A3-C1-C2 dimer plus A2 subunit reconstitutes cofactor activity and produced a factor VIIIa-like effect on the anisotropy of Fl-FFR-FIXa. However, when A2 was replaced by the A2N/A2C fragments, the resulting fluorescence signal was equivalent to that observed with the dimer alone. These results indicate that APC inactivates the cofactor at two levels within the intrinsic factor Xase complex. Cleavage of either subunit modulates the factor IXa active site, suggesting an essential synergy of interactive sites in factor VIIIa. Furthermore, cleavage of the A1 site alters the conformation of a factor X binding site within that subunit, thereby reducing the affinity of cofactor for substrate.