Vaccinia virus complement control protein (VCP) is a virulence determinant of vaccinia virus that helps protect the virus from the complement attack of the host. To characterize the interaction of VCP with C3 and C4 and understand the mechanism by which VCP inactivates complement, we have expressed VCP in a yeast expression system and compared the biologic activity of the purified protein to that of human factor H and complement receptor 1 (CR1). Recombinant VCP bound to C3 and the proteolytically cleaved form of C3 (C3b), but not to the 135,300-m.w. fragment of C3 generated using elastase (C3c) and the 35,000-m.w. fragment of C3 generated using elastase (C3d) and inhibited both the classical and alternative pathways of complement activation. Although rVCP was less effective at inhibiting the alternative pathway than factor H or CR1, it was more effective than factor H at inhibiting the classical pathway. Unlike factor H, rVCP was unable discriminate between alternative pathway-mediated lysis of rabbit and sheep E. A comparison of the cofactor activity in factor I-mediated cleavage of C3b suggested that in contrast to factor H and CR1, which displayed cofactor activity for the three sites, rVCP displayed cofactor activity primarily for the first site, leading to generation of C3b cleaved by factor I between Arg1281-Ser1282 (iC3b1). Its cofactor activity for C4b cleavages was similar to that of soluble complement receptor type 1. Purification and functional analysis of iC3b1 showed that it was unable to interact with factor B to form the alternative pathway C3 convertase, C3b,Bb. These results suggest that the interaction of VCP with C3 is different from that of factor H and CR1 and that VCP-supported first cleavage of C3b by factor I is sufficient to render C3b nonfunctional.