The first epidermal growth factor-like module of human plasma protein S (EGF1, residues 76-116) was chemically synthesized and tested for its ability to inhibit the anticoagulant cofactor activity of protein S for the anticoagulant protease, activated protein C (APC). EGF1 completely inhibited the stimulation of APC activity by protein S in plasma coagulation assays, with 50% inhibition at approx. 1 microM+ EGF1, suggesting direct binding of EGF1 to APC. To investigate a direct interaction between EGF1 and APC, fluorescence resonance energy transfer (FRET) experiments were employed. APC labelled in the active site with fluorescein as the donor, and phospholipid vesicles containing octadecylrhodamine as the acceptor, showed that EGF1 association with APC caused an increase in energy transfer consistent with a relocation of the active site of APC from 94 A (9.4 nm) to 85 A above the phospholipid surface (assuming kappa(2)=2/3). An identical increase in energy transfer between the APC active site-bound fluorescein and phospholipid-bound rhodamine was obtained upon association of protein S or protein S-C4b-binding protein complex with APC. The latter suggests the presence of a ternary complex of protein S-C4b-binding protein with APC on the phospholipid surface. To confirm a direct interaction of EGF1 with APC, rhodamine was covalently attached to the alpha-N-terminus of EGF1, and binding of the labelled EGF1 to APC was directly demonstrated using FRET. The data suggested a separation between the active site of APC and the N-terminus of EGF1 of 76 A (kappa(2)=2/3), placing the APC-bound protein S-EGF1 close to, but above, the phospholipid surface and near the two EGF domains of APC. Thus we provide direct evidence for binding of protein S-EGF1 to APC and show that it induces a conformational change in APC.