Sepsis is an infection-induced inflammatory syndrome that results in a complex network of adaptive and maladaptive alterations in homeostatic mechanisms. Severe sepsis, defined as sepsis associated with acute organ failure, is a serious disease with a mortality rate of 30–50%. The coagulation system, through complex interactions, has an important role in the final outcome of the sepsis-induced inflammatory cascade. A fine and delicate balance that normally exists between anticoagulant mechanisms and the procoagulant response is altered in sepsis. Activated protein C, an endogenous vitamin K-dependent anticoagulant, plays a major role in the down-regulation of the procoagulant arm. It also possesses anti-inflammatory properties. Endothelial damage during sepsis impairs the endothelium-dependent activation of protein C, thus shifting the balance towards thrombosis. This shift may contribute to the development of sepsis-related multi-organ failure. Evidence suggesting that activation of the coagulation system may contribute to sepsis-related morbidity and mortality has led to extensive research attempting to correct the hemostatic defects seen in septic patients. Indeed, a recent randomized controlled trial demonstrated a reduction in overall mortality in patients with severe sepsis treated with APC. In this review we discuss the pathogenesis of the coagulopathy of sepsis, as well as the new therapeutic approaches aimed at correcting the defects in the coagulation system.