Thrombin activatable fibrinolysis inhibitor (TAFI) is a carboxy-peptidase B-like proenzyme that after activation by thrombin downregulates fibrinolysis. Thrombomodulin stimulates the activation of both TAFI and protein C whereas activated protein C inhibits the activation of TAFI by downregulation of thrombin formation, a process in which protein S acts as a cofactor. Here we determined the role of protein S in the activation of TAFI and regulation of fibrinolysis. Depletion of protein S from plasma or inhibition of protein S by specific antibodies resulted in an increased rate of TAFI activation and in an increased maximum of TAFIa activity generated. The effect on the rate of TAFI activation could be attributed to the APC-independent anticoagulant function of protein S whereas the effect on the maximum activity could be attributed to the APC cofactor function of protein S. Therefore it is concluded that protein S inhibits TAFI activation in two ways. On one hand, protein S functions as a cofactor for APC which results in a reduction of the maximum induced TAFI activity and on the other hand protein S inhibits the initial thrombin formation independently of APC which results in a decreased rate of TAFI activation. The effect of the APC-independent anticoagulant activity of protein S on the activation of TAFI provides a new mechanism for the regulation of fibrinolysis in the early stages of clot formation.