Objective. To investigate the role of activated protein C (APC) in cartilage degradation.Methods. Chondrocyte expression of protein C, endothelial protein C receptor (EPCR), and thrombomodulin (TM) were evaluated by reverse transcriptionpolymerase chain reaction (RT-PCR). APC was immunolocalized in developing joints and in osteoarthritic (OA) cartilage from humans. The effect of APC on aggrecan and collagen degradation was examined in explant cultures of ovine cartilage in control cultures and in cultures stimulated with interleukin-1␣ (IL-1␣), tumor necrosis factor ␣ (TNF␣), or retinoic acid (RetA), using colorimetric assays and Western blotting. Chondrocyte expression of matrix metalloproteinases (MMPs), ADAMTS, and tissue inhibitor of metalloproteinases (TIMPs) was measured by RT-PCR. MMP-2 and MMP-9 activity was evaluated by gelatin zymography and MMP-13 by fluorogenic assay.Results. Positive cellular immunostaining for APC was found at sites of MMP activity in developing joints and in OA, but not normal, cartilage. Chondrocytes expressed messenger RNA for protein C, EPCR, and TM, with the latter 2 levels increased by IL-1␣ and TNF␣ stimulation. APC augmented aggrecan release and initiated collagen breakdown in IL-1␣-treated and TNF␣-treated cartilage, but not in normal or in RetAtreated cartilage. APC-stimulated aggrecan and collagen breakdown were due to MMP activity but were not associated with modulation of MMP, ADAMTS, or TIMP expression. APC resulted in MMP-13 activation in cartilage cultures. APC could not directly activate proMMP-13, but it was associated with increased MMP-2 and MMP-9 activity.Conclusion. APC may be a relevant activator of MMPs in cartilage and may play a role in progressive cartilage degradation in arthritis.