Factor VIII functions in the intrinsic pathway of coagulation as the cofactor for factor IXa proteolytic activation of factor X. Proteolytic cleavage is required for activation and may be responsible for inactivation of cofactor activity. To identify which of the multiple cleavages are required for activation and inactivation of factor VIII, site-directed DNA-mediated mutagenesis of the factor VIII cDNA was performed and the altered forms of factor VIII were expressed in COS-1 monkey cells and characterized. Conversion of arginine residues to isoleucine residues at the aminoterminal side of the cleavage sites at positions 740, 1648, and 1721 resulted in cleavage resistance at the modified site with no alteration in the in vitro procoagulant activity and the susceptibility to thrombin activation. Similar modification of the thrombin cleavage sites at either position 372 or position 1689 resulted in molecules with residual factor VIII activity but resistant to thrombin cleavage at the modified site and not susceptible to thrombin activation. Modification of the arginine to either an isoleucine or a lysine at residue 336, the site postulated for proteolytic inactivation by activated protein C, resulted in a factor VIII molecule with increased procoagulant activity. This increased activity may result from greater resistance to proteolytic inactivation. A model for the activation and inactivation of factor VIII is proposed.