Keratinocytes play a critical role in maintaining epidermal barrier function. Activated protein C (APC), a natural anticoagulant with anti-inflammatory and endothelial barrier protective properties, significantly increased the barrier impedance of keratinocyte monolayers, measured by electric cell substrate impedance sensing and FITC-dextran flux. In response to APC, Tie2, a tyrosine kinase receptor, was rapidly activated within 30 min, and relocated to cell-cell contacts. APC also increased junction proteins zona occludens, claudin-1 and VE-cadherin. Inhibition of Tie2 by its peptide inhibitor or small interfering RNA abolished the barrier protective effect of APC. Interestingly, APC did not activate Tie2 through its major ligand, angiopoietin-1, but instead acted by binding to endothelial protein C receptor, cleaving protease-activated receptor-1 and transactivating EGF receptor. Furthermore, when activation of Akt, but not ERK, was inhibited, the barrier protective effect of APC on keratinocytes was abolished. Thus, APC activates Tie2, via a mechanism requiring, in sequential order, the receptors, endothelial protein C receptor, protease-activated receptor-1, and EGF receptor, which selectively enhances the PI3K/Akt signaling to enhance junctional complexes and reduce keratinocyte permeability.