Antithrombin-III-Hamilton has been shown to be a structural variant of antithrombin-III (AT-III) with normal heparin affinity but impaired protease inhibitory activity. The molecular defect of AT-III-Hamilton is the substitution of Thr for Ala at amino acid residue 382. The plasma of affected individuals contains approximately equal quantities of normal AT-III and AT-III-Hamilton. When AT-III was isolated from the plasma of the propositus by heparin-Sepharose chromatography, it had identical mobility on sodium dodecyl sulfate-polyacrylamide gel electrophoresis (SDS-PAGE) to normal plasma-derived AT-III, under both reducing and nonreducing conditions. However, the AT-III-Hamilton species, separated from the propositus' normal AT-III by a combination of heparin-Sepharose and thrombin-Sepharose chromatography, had increased mobility on reductive SDS-PAGE compared with AT-III from the propositus isolated by heparin-Sepharose chromatography alone. Under nonreducing conditions this AT-III-Hamilton species had decreased mobility compared with AT-III from the propositus (or normal AT-III) isolated only by heparin-Sepharose chromatography. When incubated with either human alpha-thrombin or human factor Xa, this AT-III-Hamilton species was unreactive. Approximately 50% of the AT-III from the propositus isolated by heparin-Sepharose chromatography, when incubated with either human alpha-thrombin or factor Xa, did not form complex but was cleaved, presumably at the reactive center Arg393-Ser394. To further substantiate the biological behavior of this variant, AT-III- Hamilton polypeptides were synthesized in a cell-free system. This recombinantly produced AT-III-Hamilton, when incubated with either human alpha-thrombin or factor Xa, was cleaved by both these proteases, but did not show any complex formation. The results indicate that AT- III-Hamilton does not form a stable covalent inhibitory complex with these serine proteases but can be cleaved at the reactive center. Thus, the inhibition of serine proteases by their natural inhibitors (the serpins) involves at least two separate, but interrelated events; hydrolysis at the reactive center followed by complex formation. AT-III- Hamilton is capable of only the first of these events.