Pregnancy is associated with hemostatic challenges that may lead to thrombosis. Heparin cofactor II (HCII) is a glycosaminoglycan-dependent thrombin inhibitor present in both maternal and fetal plasma. HCII activity increases during pregnancy, and HCII levels are significantly decreased in women with severe pre-eclampsia. Dermatan sulfate (DS) specifically activates HCII and is abundant in the placenta, but the locations of DS and HCII in the placenta have not been determined. We present evidence that DS is the major anticoagulant glycosaminoglycan in the human placenta at term. DS isolated from human placenta contains disaccharides implicated in activation of HCII and has anticoagulant activity similar to that of mucosal DS. Immunohistochemical studies revealed that DS is associated with fetal blood vessels and stromal regions of placental villi but is notably absent from the syncytiotrophoblast cells in contact with the maternal circulation. HCII colocalizes with DS in the walls of fetal blood vessels and is also present in syncytiotrophoblast cells. Our data suggest that DS is in a position to activate HCII in the fetal blood vessels or in the stroma of placental villi after injury to the syncytiotrophoblast layer and thereby inhibit fibrin generation in the placenta.