Increased endothelial cell (EC) permeability is central to the pathophysiology of inflammatory syndromes such as sepsis and acute lung injury (ALI). Activated protein C (APC), a serine protease critically involved in the regulation of coagulation and inflammatory processes, improves sepsis survival through an unknown mechanism. We hypothesized a direct effect of APC to both prevent increased EC permeability and to restore vascular integrity after edemagenic agonists. We measured changes in transendothelial electrical resistance (TER) and observed that APC produced concentration-dependent attenuation of TER reductions evoked by thrombin. We next explored known EC barrier-protective signaling pathways and observed dose-dependent APC-mediated increases in cortical myosin light chain (MLC) phosphorylation in concert with cortically distributed actin polymerization, findings highly suggestive of Rac GTPase involvement. We next determined that APC directly increases Rac1 activity, with inhibition of Rac1 activity significantly attenuating APC-mediated barrier protection to thrombin challenge. Finally, as these signaling events were similar to those evoked by the potent EC barrier-enhancing agonist, sphingosine 1-phosphate (S1P), we explored potential cross-talk between endothelial protein C receptor (EPCR) and S1P1, the receptors for APC and S1P, respectively. EPCR-blocking antibody (RCR-252) significantly attenuated both APC-mediated barrier protection and increased MLC phosphorylation. We next observed rapid, EPCR and PI 3-kinase-dependent, APC-mediated phosphorylation of S1P1 on threonine residues consistent with S1P1 receptor activation. Co-immunoprecipitation studies demonstrate an interaction between EPCR and S1P1 upon APC treatment. Targeted silencing of S1P1 expression using siRNA significantly reduced APC-mediated barrier protection against thrombin. These data suggest that novel EPCR ligation and S1P1 transactivation results in EC cytoskeletal rearrangement and barrier protection, components potentially critical to the improved survival of APC-treated patients with severe sepsis.