Protein modification with poly(ethylene glycol) (PEG) can prolong circulatory lifetime and lower protein antigenicity in an animal. These benefits may arise from the proposed mechanism of PEG action, molecular shielding of the protein surface, and lowered interaction with other macromolecules. Proteins that depend on macromolecule association for their function would not seem good targets for PEG modification as the benefits may be mitigated by loss of function. Indeed, high loss of function applied to PEG-modified factor VIIa and to active site-blocked blood clotting factors Xa or IXa was studied. A surprising finding was that PEG-modified, active site-blocked factor VIIa (PEG-VIIai, PEG-40 000) retained 40% of its function despite an 18-fold increase in circulatory lifetime. The discrepancy between functional loss and increased circulatory lifetime was consistent with a process that was limited by the diffusion step of assembly rather than the chemical binding step. The impact of PEG-40 000 on diffusion of VIIai is small (about 3-fold) relative to its potential impact on molecular shielding during the chemical binding step of association. These properties extended to a mutant of VIIai (P10Q/K32E, QE-VIIai) that has 25-fold higher function than wild-type factor VIIai. Overall, properties of PEG-modified proteins can suggest features of the kinetic mechanism and may provide enhanced proteins for anticoagulation therapy.