Endothelial and tumor cells synthesize tissue factor pathway inhibitor (TFPI-1), which regulates tissue factor (TF) function by TF. VIIa. Xa. TFPI-1 quaternary complex formation (where VIIa and Xa are coagulation factors) and by translocation of these complexes into glycosphingolipid-rich microdomains of the cell membrane. Recombinant TFPI-1 added exogenously to cells is targeted to a degradation pathway. This study analyzes whether quaternary complex formation with endogenous TFPI-1 results also in internalization and degradation. We demonstrate that endogenous TFPI-1 and recombinant TFPI-1 differ in their distribution on the cell surface. Recombinant TFPI-1 is found in phospholipid- and glycosphingolipid-rich membrane domains, whereas endogenous TFPI-1 preferentially localizes to glycosphingolipid-rich microdomains. On quaternary complex formation, endogenous TFPI-1 remains protease sensitive and accessible for antibodies on intact cells, demonstrating that it is not appreciably internalized. Rather, regulation of TF by TFPI-1 is restored within 12 hours, consistent with dissociation of quaternary complexes on the cell surface. Endogenous TFPI-1 can be released from the cell surface by phospholipase treatment, indicating that TFPI-1 either is a glycosyl phosphatidylinositol (GPI)-anchored protein or binds to a GPI-linked receptor. We demonstrate that expression of a recombinant GPI-anchored form of TFPI-1 targets TF. VIIa complexes to glycosphingolipid-rich membrane fractions. Thus, GPI anchoring of TFPI-1 is sufficient for regulation of TF. VIIa complex function by a pathway of reversible inhibition rather than internalization and degradation.