Thrombomodulin is the endothelial cell cofactor for thrombin-catalyzed activation of protein C. Recently, we isolated a 10-kDa thrombin binding fragment, CB3, from the epidermal growth factor precursor homology domain (epidermal growth factor (EGF)-like regions) of thrombomodulin (Kurasawa, S., Stearns, D. J., Jackson, K.W., and Esmon, C.T. (1988) J. Biol. Chem. 263, 5993-5996). The CB3 fragment did not, however, support protein C activation. A 29-kDa fragment, called CB23, has now been isolated and corresponds to residues 310-486 in the EGF-like region of thrombomodulin. The CB23 fragment bound thrombin and accelerated thrombin-catalyzed protein C activation. With two separate preparations of CB23, the Km for protein C was 1.6 and 1.9 microM and the Kd for thrombin was 8.9 and 13.2 nM. The carboxyl terminus of CB23 and CB3 was identified by isolation and sequence analysis of a tryptic peptide from CB3. The sequence of this peptide corresponded to Asn457-Ser486, indicating that the carboxyl terminus of these fragments is 6 residues beyond the sixth EGF-like region of thrombomodulin. In addition, although CB3 cannot accelerate protein C activation, CB3 did inhibit the rate of thrombin-catalyzed fibrinopeptide release from fibrinogen. Thus, like native thrombomodulin, CB3 will alter thrombin's substrate specificity, but protein C activation requires additional information all of which can be provided by other regions of the EGF-like domain.