Protein C inhibitor (PCI) is a serpin with affinity for heparin and phosphatidylethanolamine (PE). We analyzed the interaction of PCI with different phospholipids and their oxidized forms. PCI bound to oxidized PE (OxPE), and oxidized and unoxidized phosphatidylserine (PS) immobilized on microtiter plates and in aqueous suspension. Binding to OxPE and PS was competed by heparin, but not by the aminophospholipid-binding protein annexin V or the PCI-binding lipid retinoic acid. PS and OxPE stimulated the inhibition of activated protein C (aPC) by PCI in a Ca(++)-dependent manner, indicating that binding of both, aPC (Ca(++) dependent) and PCI (Ca(++) independent), to phospholipids is necessary. A peptide corresponding to the heparin-binding site of PCI abolished the stimulatory effect of PS on aPC inhibition. No stimulatory effect of phospholipids on aPC inhibition was seen with a PCI mutant lacking the heparin-binding site. A heparin-like effect of phospholipids (OxPE) was not seen with antithrombin III, another heparin-binding serpin, suggesting that it is specific for PCI. PCI and annexin V were found to be endogenously colocalized in atherosclerotic plaques, supporting the hypothesis that exposure of oxidized PE and/or PS may be important for the local regulation of PCI activity in vivo.