Factor XIa (FXIa) is a serine protease important for initiating the intrinsic pathway of blood coagulation. Protease nexin 2 (PN2) is a Kunitz-type protease inhibitor secreted by activated platelets and a physiologically important inhibitor of FXIa. Inhibition of FXIa by PN2 requires interactions between the two proteins that are confined to the catalytic domain of the enzyme and the Kunitz protease inhibitor (KPI) domain of PN2. Recombinant PN2KPI and a mutant form of the FXI catalytic domain (FXIac) were expressed in yeast, purified to homogeneity, co-crystallized, and the structure of the complex was solved at 2.6 angstroms (Protein Data Bank code 1ZJD). In this complex, PN2KPI has a characteristic, disulfide-stabilized double loop structure that fits into the FXIac active site. To determine the contributions of residues within PN2KPI to its inhibitory activity, selected point mutations in PN2KPI loop 1 11TGPCRAMISR20 and loop 2 34FYGGC38 were tested for their ability to inhibit FXIa. The P1 site mutation R15A completely abolished its ability to inhibit FXIa. IC50 values for the wild type protein and the remaining mutants were as follows: PN2KPI WT, 1.28 nM; P13A, 5.92 nM; M17A, 1.62 nM; S19A, 1.86 nM; R20A, 5.67 nM; F34A, 9.85 nM. The IC50 values for the M17A and S19A mutants were not significantly different from those obtained with wild type PN2KPI. These functional studies and activated partial thromboplastin time analysis validate predictions made from the PN2KPI-FXIac co-crystal structure and implicate PN2KPI residues, in descending order of importance, Arg15, Phe34, Pro13, and Arg20 in FXIa inhibition by PN2KPI.