The present invention provides methods of increasing the half-life and/or specific activity of factor VIII. More specifically, the invention provides methods of increasing the half-life and/or specific activity of factor VIII by substituting one or more amino acids in the A2 domain. It further provides methods for producing such factor VIII mutants. The invention also provides polynucleotides encoding the mutant factor VIII, and methods of treating hemophilia using the polypeptides and polynucleotides of the invention.