Protein Z-dependent protease inhibitor (ZPI) is a recently identified member of the serpin superfamily that functions as a cofactor-dependent regulator of blood coagulation factors Xa (FXa) and XIa. Here we show that ZPI and its cofactor, protein Z (PZ), inhibit procoagulant membrane-bound factor Xa by the branched pathway acyl-intermediate trapping mechanism used by other serpins, but with significant variations of this mechanism that are unique to ZPI. Rapid kinetic analyses showed that the reaction proceeded by the initial assembly of a membrane-associated PZ-ZPI-FXa Michaelis complex (KM 53 ± 5 nM) followed by conversion to a stable ZPI-FXa complex (k lim 1.2 ± 0.1 s-1). Cofactor premixing experiments together with independent kinetic analyses of ZPI-PZ and factor Xa-PZ-membrane complex formation suggested that assembly of the Michaelis complex through either ZPI-PZ-lipid or factor Xa-PZ-lipid intermediates was rate-limiting. Reaction stoichiometry analyses and native PAGE showed that for every factor Xa molecule inhibited by ZPI, two serpin molecules were cleaved. Native PAGE and immunoblotting showed that PZ dissociated from ZPI once ZPI forms a stable complex with FXa, and kinetic analyses confirmed that PZ acted catalytically to accelerate the membrane-dependent ZPI-factor Xa reaction. The ZPI-FXa complex was only transiently stable and dissociated with a rate constant that showed a bell-shaped pH dependence indicative of participation of factor Xa active-site residues. The complex was detectable by SDS-PAGE when denatured at low pH, consistent with it being a kinetically trapped covalent acyl-intermediate. Together our findings show that ZPI functions like other serpins to regulate the activity of FXa but in a manner uniquely dependent on protein Z, procoagulant membranes, and pH.