Prothrombinase is the enzymatic complex responsible for timely thrombin formation. Activation of human prothrombin is the consequence of two cleavages at Arg271 and Arg320 in prothrombin by factor Xa. Membrane-bound factor Xa alone catalyzes prothrombin activation following initial cleavage at Arg271 and prethrombin 2 formation (pre2 pathway). Factor Va directs prothrombin activation by factor Xa through the meizothrombin pathway, characterized by initial cleavage at Arg320 (meizo pathway). We have previously shown that a pentapeptide encompassing amino acid sequence 695–699 from the COOH-terminus of the heavy chain of factor Va (Asp-Tyr-Asp-Tyr-Gln, DYDYQ) interacts with anion binding exosite I (ABE-I) of thrombin and inhibits prothrombin activation by prothrombinase. The peptide was found to be a competitive inhibitor of prothrombinase with respect to substrate. According to the mode of inhibition, we postulated that the peptide binds prothrombin in competition with the binding of the substrate to the enzyme, and inhibits prothrombinase activity by substrate depletion. This mode of DYDYQ inhibition of prothrombin activation by the factor Va-factor Xa complex is similar to that previously demonstrated for sulfated hirugen. To understand the mechanism of inhibition of thrombin formation by DYDYQ we have studied prothrombin activation by gel electrophoresis. Titration of plasma-derived prothrombin activation by fully assembled prothrombinase, with increasing concentrations of peptide, resulted in complete inhibition of the meizo pathway. However, thrombin formation still occurred through the pre2 pathway. Higher peptide concentrations were required to impair thrombin formation through the latter pathway. These data demonstrate that the peptide preferentially inhibits initial cleavage of prothrombin by prothrombinase at Arg320. These findings were corroborated by studying the kinetics of activation of recombinant mutant prothrombin molecules rMZ-II (R155A/R284A/R271A) and rP2-II (R155A/R284A/R320A) which can be only cleaved at Arg320 and Arg271 respectively. Cleavage of rMZ-II by prothrombinase was completely inhibited by low concentrations of DYDYQ while high concentrations of pentapeptide were required to inhibit cleavage of rP2-II. The pentapeptide also interfered with thrombin formation by membrane-bound factor Xa alone in the absence of factor Va. Nonetheless, while the rate for cleavage at Arg271 of plasma-derived prothrombin or rP2-II by membrane-bound factor Xa alone was significantly accelerated in the presence of DYDYQ, resulting in accumulation of prethrombin 2, the rate for cleavage at Arg320 of plasma-derived prothrombin or rMZ-II by membrane-bound factor Xa alone was only moderately affected by the pentapeptide. Our data demonstrate that a pentapeptide mimicking amino acids 695–699 of the heavy chain of factor Va has opposing effects on membrane-bound factor Xa for prothrombin activation, depending on the incorporation of factor Va in prothrombinase. In the presence of the cofactor the peptide inhibits the rate of thrombin generation by specifically interfering with initial cleavage of prothrombin at Arg320, while in the absence of factor Va the pentapeptide accelerates cleavage of prothrombin by factor Xa at Arg271. Thus, the amino acid region spatially surrounding proexosite I in prothrombin most likely has two interactive sites for the components of prothrombinase, a factor Va interactive site and a factor Xa binding site.