Activated protein C (APC) has endothelial barrier protective effects that require binding to endothelial protein C receptor (EPCR) and cleavage of protease activated receptor-1 (PAR1) and that may play a role in the anti-inflammatory action of APC. In this study we investigated whether protein C (PC) activation by thrombin on the endothelial cell surface may be linked to efficient protective signaling. To minimize direct thrombin effects on endothelial permeability we used the anticoagulant double mutant thrombin W215A/E217A (WE). Activation of PC by WE on the endothelial cell surface generated APC with high barrier protective activity. Comparable barrier protective effects by exogenous APC required a 4-fold higher concentration of APC. To demonstrate conclusively that protective effects in the presence of WE are mediated by APC generation and not direct signaling by WE, we used a PC variant with a substitution of the active site serine with alanine (PC S360A). Barrier protective effects of a low concentration of exogenous APC were blocked by both wildtype PC and PC S360A, consistent with their expected role as competitive inhibitors for APC binding to EPCR. WE induced protective signaling only in the presence of wild type PC but not PC S360A and PAR1 cleavage was required for these protective effects. These data demonstrate that the endogenous PC activation pathway on the endothelial cell surface is mechanistically linked to PAR1-dependent autocrine barrier protective signaling by the generated APC. WE may have powerful protective effects in systemic inflammation through signaling by the endogenously generated APC.