Thrombomodulin (TM) is a multidomain protein that serves as a cofactor in a major natural anticoagulant system. To further characterize the structure-function of TM, we have transfected COS cells with different truncated forms of TM. In the first form, COS cells expressing TM that lacks the putative signal peptide (17 residues); the lectin-like, hydrophobic N-terminal domain (226 residues); and 12 residues of the first epidermal growth factor (EGF)-like repeat (COSdel.238 cells) were found to function normally with respect to TM transport to the cell surface and thrombin-dependent protein C activation. However, in contrast to wild-type TM, as visually studied by immunofluorescence and immunogold electron microscopy, the COSdel.238 cells did not constitutively internalize anti-TM-TM or thrombin-TM complexes. To identify the region responsible for mediating the endocytic process, deletant forms of TM lacking either the lectin-like region (residues 2-155) or the hydrophobic region of the N-terminal domain (residues 161-202) were expressed in COS cells (COSdel.2-155 and COSdel.161-202, respectively). Protein C cofactor activity was maintained in both cells. Although the COSdel.161-202 cells behaved similarly to wild-type TM-transfected cells, visual studies showed a lack of constitutive internalization of thrombin-TM or anti-TM-TM complexes in the COSdel.2-155 cells. We conclude that the lectin-like domain of human TM serves to regulate cell surface expression of TM via the endocytic route and therefore may also play a major physiologic role in controlling intracellular and extracellular accumulation of thrombin in a variety of biologic systems.