Active-site inhibitors of the human tissue factor-Factor VIIa complex (TF.FVIIa) that are both potent and specific have been selected from Alzheimer's amyloid beta-protein precursor inhibitor (APPI) Kunitz domain libraries using a strategy termed competitive phage selection. Phage display Libraries I-III, previously sorted by direct selection, were sorted by competitive selection against immobilized TF.FVIIa in which increasing amounts of Factor XIa (FXIa) were added to the selection buffer to remove phage with high affinity for FXIa. The most striking difference in the selected Kunitz domain sequences was at the P4' position where Lys was highly preferred instead of Leu which was found here by direct selection (Dennis, M. S., and Lazarus, R. A. (1994) J. Biol. Chem. 269, 22129-22136). In addition, both Lys and Arg were selected in the P1 position as opposed to Arg alone. A new library (Library IV) was constructed which contained all previously observed amino acids at 9 positions in the primary and secondary binding loops of APPI. Comparable results were obtained by sorting Library IV against immobilized TF.FVIIa in the presence of either FXIa alone or FXIa, plasma kallikrein, and plasmin. The Kunitz domains obtained by either competitive selection strategy potently inhibited TF.FVIIa, with Ki* values ranging from about 2 to 20 nM; the Ki* values were generally > 1 microM for FXIa and plasma kallikrein and ranged from 4 to 200 nM for plasmin. Variants selective for TF.FVIIa were assayed for free FVIIa and FXa inhibitory activity and characterized in coagulation assays. A rationale for the selection of Lys at both the P4' and P1 positions based upon comparison of sequences and structures of relevant serine proteases and inhibitors is presented.