Protamine sulfate is a positively charged polypeptide widely used to reverse heparin-induced anticoagulation. Paradoxically, prospective randomized trials have shown that protamine administration for heparin neutralization is associated with increased bleeding, particularly after cardiothoracic surgery with cardiopulmonary bypass. The molecular mechanism(s) through which protamine mediates this anticoagulant effect has not been defined. In vivo administration of pharmacologic doses of protamine to BALB/c mice significantly reduced plasma thrombin generation and prolonged tail-bleeding time (from 120 to 199 seconds). Similarly, in pooled normal human plasma, protamine caused significant dose-dependent prolongations of both prothrombin time and activated partial thromboplastin time. Protamine also markedly attenuated tissue factor-initiated thrombin generation in human plasma, causing a significant decrease in endogenous thrombin potential (41% +/- 7%). As expected, low-dose protamine effectively reversed the anticoagulant activity of unfractionated heparin in plasma. However, elevated protamine concentrations were associated with progressive dose-dependent reduction in thrombin generation. To assess the mechanism by which protamine mediates down-regulation of thrombin generation, the effect of protamine on factor V activation was assessed. Protamine was found to significantly reduce the rate of factor V activation by both thrombin and factor Xa. Protamine mediates its anticoagulant activity in plasma by down-regulation of thrombin generation via a novel mechanism, specifically inhibition of factor V activation.