A peptide model for the heparin binding site of antithrombin III (ATIII) was synthesized to elucidate the structural consequences of heparin binding. This peptide [ATIII(123-139)] and a sequence-permuted analogue (ATIII random) showed similar conformational behavior (as analyzed by circular dichroism spectroscopy) in aqueous and organic media. In the presence of heparin, however, the peptide ATIII(123-139) assumed a stable conformation, whereas peptide ATIII random did not. Complex formation was saturable and sensitive to salt. The ATIII(123-139)-heparin complex contained beta-structure, rather than helical structure. This finding is incompatible with current models of heparin binding and suggests that heparin binding may induce nonnative structures at the binding site which could, in turn, lead to activation of ATIII. The peptide ATIII(123-139) was able to inhibit the binding of ATIII by heparin, consistent with the notion that this peptide may be a model for the heparin binding site.