Protein S is a cofactor for tissue factor pathway inhibitor (TFPI) that critically reduces the inhibition constant for FXa to below the plasma concentration of TFPI. TFPI Kunitz domain 3 is required for this enhancement to occur. To delineate the molecular mechanism underlying enhancement of TFPI function, in the present study, we produced a panel of Kunitz domain 3 variants of TFPI encompassing all 12 surface-exposed charged residues. Thrombin-generation assays in TFPI-depleted plasma identified a novel variant, TFPI E226Q, which exhibited minimal enhancement by protein S. This was confirmed in purified FXa inhibition assays in which no protein S enhancement of TFPI E226Q was detected. Surface plasmon resonance demonstrated concentration-dependent binding of protein S to wild-type TFPI, but almost no binding to TFPI E226Q. We conclude that the TFPI Kunitz domain 3 residue Glu226 is essential for TFPI enhancement by protein S.