The protein C pathway comprises a major physiological anticoagulant system. Its major congenital defects, heterozygous deficiencies of protein C and protein S as well as activated protein C resistance due to G1691A mutated factor V (Factor V Leiden), are associated with pediatric venous thromboembolic disease. The protein C pathway is centrally involved in the control of both coagulation and inflammation during sepsis and other inflammatory conditions presenting with disseminated intravascular coagulation. This article reviews the physiology of the protein C pathway with special emphasis on pediatric aspects. Clinical implications of the protein C pathway defects in pediatric venous thromboembolism as well as acquired disturbances of protein C pathway during sepsis are discussed.