Tissue factor (TF) pathway inhibitor (TFPI) regulates factor X activation through the sequential inhibition of factor Xa and the VIIa·TF complex. Factor Xa formation was studied in a purified, reconstituted system, at plasma concentrations of factor X and TFPI, saturating concentrations of factor VIIa, and increasing concentrations of TF reconstituted into phosphatidylcholine: phosphatidylserine membranes (TF/PCPS) or PC membranes (TF/PC). The initial rate of factor Xa formation was equivalent in the presence or absence of 2.4 nM TFPI. However, reaction extent was small (<20%) relative to that observed in the absence of TFPI, implying the rapid inhibition of VIIa·TF during factor X activation. Initiation of factor Xa formation using increasing concentrations of TF/PCPS or TF/PC in the presence of TFPI yielded families of progress curves where both initial rate and reaction extent were linearly proportional to the concentration of VIIa·TF. These observations were consistent with a kinetic model in which the rate- limiting step represents the initial inhibition of newly formed factor Xa. Numerical analyses of progress curves yielded a rate constant for inhibition of VIIa·TF by Xa. TFPI (> 108 M-1 · s-1) that was substantially greater than the value (7.34 ± 0.8 x 106 M-1 · s-1) directly measured. Thus, VIIa·TF is inhibited at near diffusion-limited rates by Xa·TFPI formed during catalysis which cannot be explained by studies of the isolated reaction. We pro~ pose that the predominant inhibitory pathway during factor X activation may involve the initial inhibition of factor Xa either bound to or in the near vicinity of VIIa·TF on the membrane surface. As a result, VIIa·TF inhibition is unexpectedly rapid, and the concentration of active factor Xa that escapes regulation is linearly dependent on the availability of TF.