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Activated protein C (APC) is an important modulator of vascular function that has antithrombotic and anti-inflammatory properties. Studies in humans have shown modulation of endotoxin-induced hypotension by recombinant human APC, drotrecogin alfa (activated), however, the mechanism for this effect is unclear. We have found that APC suppresses the induction of the potent vasoactive peptide adrenomedullin (ADM) and could downregulate lipopolysaccharide (LPS)-induced ADM messenger RNA (mRNA) and nitrite levels in cell culture. This effect was dependent on signaling through protease-activated receptor 1. Addition of 1400W, an irreversible inducible nitric oxide synthase (iNOS) inhibitor, inhibited LPS-induced ADM mRNA, suggesting that ADM induction is NO mediated. Furthermore, in a rat model of endotoxemia, APC (100 μg/kg, i.v.) prevented LPS (10 mg/kg, i.v.)-induced hypotension, and suppressed ADM mRNA and protein expression. APC also inhibited iNOS mRNA and protein levels along with reduction in NO by-products (NOx). We also observed a significant reduction in iNOS-positive leukocytes adhering to vascular endothelium after APC treatment. Moreover, we found that APC inhibited the expression of interferon-γ (IFN-γ), a potent activator of iNOS. In a human study of LPS-induced hypotension, APC reduced the upregulation of plasma ADM levels, coincident with protection against the hypotensive response. Overall, we demonstrate that APC blocks the induction of ADM, likely mediated by IFN-γ and iNOS, and suggests a mechanism that may account for ameliorating LPS-induced hypotension. Furthermore, our data provide a new understanding for the role of APC in modulating vascular response to insult.