Sepsis remains a major health threat in intensive care medicine. The physiological functions of the coagulation cascade extend beyond blood coagulation and play a pivotal role in inflammation. We investigated whether the use of recombinant thrombomodulin (rTM), which has activity comparable with antithrombin, tissue factor pathway inhibitor, and activated protein C, could inhibit secretion of cytokines and high-mobility group box 1 (HMGB1) protein, thus reducing lung damage in a rat model of LPS-induced systemic inflammation. Rats treated with an intravenous injection of either rTM or saline were injected concurrently with intravenous LPS. In addition, mouse macrophage RAW264.7 cells were stimulated with LPS, with or without simultaneous rTM treatment. Histological examination revealed marked reductions of interstitial congestion, edema, inflammation, and hemorrhage in lung tissue harvested 12 h after treatment with both agents compared with LPS administration alone. LPS-induced secretion of proinflammatory cytokines and HMGB1 protein was inhibited by treatment with rTM. The presence of HMGB1 protein in the lung was examined by immunohistochemistry; the number of HMGB1-positive cells was significantly lower in LPS-treated animals that also received rTM. In the in vitro studies, rTM administration inhibited the activation of nuclear factor-kappa B by inhibiting I kappa B phosphorylation. The anticoagulant rTM blocked the LPS-induced inflammatory response and protected against acute lung injury normally associated with endotoxemia in this rat sepsis model. Given these results, rTM is a strong candidate as a therapeutic agent for various systemic inflammatory diseases.