The invention relates generally to a new functional protein S assay and kit that is based on the ability of endogenous protein S to prolong clotting time. In the assay procedure, a test plasma sample is diluted with protein S deficient plasma, followed by the addition of purified or recombinant tissue factor (pTF or rTF), purified natural or synthetic phospholipid (pPL or sPL) and activated protein C (APC) or protein C activator (PCA). The clotting time is then measured and compared to a standard curve or a normal control.