The level of thrombomodulin (TM) on cell surfaces reflects its biosynthesis, intracellular turnover, proteolytic cleavage, and release in soluble form (sTM). In the present study we examined the mechanisms mediating and regulating sTM release. Inducers of endothelial protein C receptor (EPCR) shedding, such as proinflammatory cytokines, phorbol ester, and ionomycin did not affect sTM release from human umbilical endothelial cells (HUVECs). In contrast, several natural and synthetic reducing compounds (i.e., glutathione, dihydrolipoic acid, homocysteine, N-acetyl-L-cysteine, dithiothreitol, and non-thiol cell-impermeable reductant, tris-(2-carboxyethyl)phosphine), but not oxidized glutathione or α-lipoic acid effectively up-regulated the release of sTM in endothelial cells. In addition, the direct activator of metalloproteases, 4-aminophenylmercuric acetate (APMA), was an effective inducer of TM shedding. Considerable inhibition of protein C activation was found with APMA, which is consistent with the effects of this agent on TM shedding. In addition to metalloproteases, serine proteases were shown by pharmacological inhibition studies to be involved in a similar degree in basal sTM release; however, serine proteases seem preferentially to be involved in thiol-induced TM proteolytic processing. From comparisons of non-thiol containing synthetic substrate with human recombinant TM it was demonstrated that disulfide bonds within TM are most likely modified by thiols making TM more susceptible to serine protease-mediated cleavage. In summary, the study shows that the extracellular redox state plays a crucial role in the regulation of TM shedding in HUVECs thereby offering new strategies to interfere with diminished activation of protein C during inflammatory diseases.