Thrombomodulin (TM) is a glycoprotein normally present in the membrane of endothelial cells that binds thrombin and changes its substrate specificity to produce activated protein C (APC) that has antithrombotic and anti-inflammatory features. To compensate for loss of endogenous TM in pathology, we have fused recombinant TM with single chain variable fragment (scFv) of an antibody to mouse platelet endothelial cell adhesion molecule-1 (PECAM). This fusion, anti-PECAM scFv/TM, anchors on the endothelium, stimulates APC production, and provides therapeutic benefits superior to sTM in animal models of acute thrombosis and inflammation. However, in conditions of oxidative stress typical of vascular inflammation, TM is inactivated via oxidation of the methionine 388 (M388) residue. Capitalizing on the reports that M388L mutation renders TM resistant to oxidative inactivation, in this study we designed a mutant anti-PECAM scFv/TM M388L. This mutant has the same APC-producing capacity and binding to target cells, yet, in contrast to wild-type fusion, it retains APC-producing activity in an oxidizing environment in vitro and in vivo. Therefore, oxidant resistant mutant anti-PECAM scFv/TM M388L is a preferable targeted biotherapeutic to compensate for loss of antithrombotic and anti-inflammatory TM functions in the context of vascular oxidative stress.