In addition to its pivotal role in hemostasis, factor Xa binds to human umbilical vein endothelial cells through the recognition of a protein called effector cell protease receptor (EPR-1). This interaction is associated with signal transduction, generation of intracellular second messengers, and modulation of cytokine gene expression. Inhibitors of factor Xa catalytic activity block these responses, thus indicating that the factor Xa-dependent event of local proteolysis is absolutely required for cell activation. Because EPR-1 does not contain proteolysis-sensitive sites, we investigated the possibility that signal transduction by factor Xa requires proteolytic activation of a member of the protease-activated receptor (PAR) gene family. Catalytic inactivation of factor Xa by DX9065 suppressed factor Xa-induced increase in cytosolic free Ca(2+) in endothelial cells (IC(50)=0.23 micromol/L) but failed to reduce ligand binding to EPR-1. In desensitization experiments, trypsin or the PAR-2-specific activator peptide, SLIGKV, ablated the Ca(2+) signaling response induced by factor Xa. Conversely, pretreatment of endothelial cells with factor Xa blocked the PAR-2-dependent increase in cytosolic Ca(2+) signaling, whereas PAR-1-dependent responses were unaffected. Direct cleavage of PAR-2 by factor Xa on endothelial cells was demonstrated by cleavage of a synthetic peptide duplicating the PAR-2 cleavage site and by immunofluorescence with an antibody to a peptide containing the 40-amino acid PAR-2 extracellular extension. These data suggest that factor Xa induces endothelial cell activation via a novel cascade of receptor activation involving docking to EPR-1 and local proteolytic cleavage of PAR-2.