Impairment of the protein C pathway plays a central role in the pathogenesis of sepsis. Administration of recombinant human activated protein C (rhAPC) may correct the dysregulated anticoagulant mechanism and prevent propagation of thrombin generation and formation of microvascular thrombosis. Furthermore, it may simultaneously modulate the inflammatory response. It is likely that the beneficial effect of rhAPC observed in experimental and clinical studies of severe sepsis results from a combination of mechanisms that modulate the entangled processes of coagulation and inflammation. This review presents an analysis of the various mechanisms of action of rhAPC in sepsis.