Recent studies have shown that infusion of the anticoagulant protein, activated protein C (APC), can ameliorate many of the systemic effects of endotoxemia in experimental animals, although the mechanisms in this action are unknown. We investigated the effects of APC on the responses of blood monocytes, alveolar macrophages, and cells of the monocyte line, THP-1, to stimulation in vitro by LPS, IFN-gamma, or PMA. Mononuclear phagocyte (MO) activation was associated with rapid production of TNF-alpha, down-regulation of the glycophosphatidylinositol-linked protein CD14 (the key MO receptor for complexes of LPS and LPS-binding protein responsible for intracellular signaling), and down-regulation of the related LPS-binding proteins CD11b and CD18. Addition of APC, but not the zymogen, PC, or active site-blocked APC, inhibited selected MO responses involving the CD14-dependent LPS-induced pathway of MO activation, or activation induced by IFN-gamma or PMA. Thus, APC inhibited the production of TNF-alpha and prevented down-regulation of membrane CD11b, CD14, and CD18, but had no effect on up-regulation of MHC class II, ICAM-1, or IL-2R, down-regulation of MO expression of another glycophosphatidylinositol-linked protein, CD59, or production of reactive oxygen intermediates. These data show that APC inhibits host cytokine production but maintains MO responses associated with adhesion, phagocytosis, and killing of Gram-negative bacteria, such that use of APC may be a logical and potent adjunctive therapy in select inflammatory diseases involving MO activation and damaging host cytokine overproduction.