Protein S is a vitamin K-dependent plasma protein which serves as the cofactor for activated protein C. Protein S circulates in both an active, free form and in an inactive complex with C4b-binding protein. To elucidate the role of protein S in disease states and during oral anticoagulation, we developed a functional assay for protein S that permits evaluation of the distribution of protein S between free and bound forms and permits determination of the specific activity of the free protein S. In liver disease, free protein S antigen is moderately reduced and the free protein S has significantly reduced specific activity. In disseminated intravascular coagulation, reduced protein S activity occurs due to a redistribution of protein S to the inactive bound form. During warfarin anticoagulation, reduction of free protein S antigen and the appearance of forms with abnormal electrophoretic mobility significantly decrease protein S activity. After the initiation of warfarin, the apparent half-life of protein S is 42.5 h. In patients with thromboembolic disease, transient protein S deficiency occurs due to redistribution to the complexed form. Caution should be exercised in diagnosing protein S deficiency in such patients by use of functional assays.