Potent anticoagulants have been derived by targeting the tissue factor-factor VIIa complex with naive peptide libraries displayed on M13 phage. The peptides specifically block the activation of factor X with a median inhibitory concentration of 1 nM and selectively inhibit tissue-factor-dependent clotting. The peptides do not bind to the active site of factor VIIa; rather, they work by binding to an exosite on the factor VIIa protease domain, and non-competitively inhibit activation of factor X and amidolytic activity. One such peptide (E-76) has a well defined structure in solution determined by NMR spectroscopy that is similar to the X-ray crystal structure when complexed with factor VIIa. These structural and functional studies indicate an allosteric 'switch' mechanism of inhibition involving an activation loop of factor VIIa and represent a new framework for developing inhibitors of serine proteases.