Activated protein C binds to Protein S on appropriate cell surfaces where it inactivates factors Va and VIIIa.
Protein S is best known as a cofactor for the Activated protein C (APC)-catalyzed inactivation of factor Va (Walker 1980). Protein S must be membrane-bound to display this cofactor activity (Hackeng et al. 1993). Protein S binding brings the active site of APC closer to the phospholipid cell surface (Yegneswaran et al. 1999).

APC proteolysis involves cleavage of the factor Va heavy chain at Arg-306 and Arg-506 (Nicolaes et al. 1985). Most factor Va molecules are initially cleaved at Arg506, yielding a partially active intermediate, followed by complete inactivation through cleavage at Arg306 (Kalafatis et al. 1994). Protein S stimulates the cleavage at Arg306 ~20-fold (Rosing et al. 1995) and also counteracts the protective effect of factor Xa on Arg506 cleavage (Norstrom et al. 2006).

Protein S also enhances the APC-mediated inactivation of factor VIIIa (van de Poel et al. 2001). Protein S and factor V act as synergistic cofactors in the APC-mediated inactivation of factor VIIIa (Shen & Dahlback 1994, Somajo et al. 2014).