The activation and regulation of coagulation Factor XIII (FXIII) protein has been the subject of active research for the past three decades. Although discrete evidence exists on various aspects of FXIII activation and regulation a combinatorial structure/functional view in this regard is lacking. In this study, we present results of a structure/function study of the functional chain of events for FXIII. Our study shows how subtle chronological submolecular changes within calcium binding sites can bring about the detailed transformation of the zymogenic FXIII to its activated form especially in the context of FXIIIA and FXIIIB subunit interactions. We demonstrate what aspects of FXIII are important for the stabilization (first calcium binding site) of its zymogenic form and the possible modes of deactivation (thrombin mediated secondary cleavage) of the activated form. Our study for the first time provides a structural outlook of the FXIIIA2B2 heterotetramer assembly, its association and dissociation. The FXIIIB subunits regulatory role in the overall process has also been elaborated upon. In summary, this study provides detailed structural insight into the mechanisms of FXIII activation and regulation that can be used as a template for the development of future highly specific therapeutic inhibitors targeting FXIII in pathological conditions like thrombosis.