Thrombin, a protease generated at sites of vascular injury, signals cellular responses vital for hemostasis and thrombosis. How thrombin, an enzyme rather than a classical ligand, effects graded and concentration-dependent responses in its target cells has been a long-standing question. Thrombin activates its receptor by cleaving off an activation peptide to unmask a tethered peptide ligand. We utilized a thrombin receptor with an epitope-tagged activation peptide to directly demonstrate thrombin receptor cleavage and to examine the kinetics of receptor activation on intact cells. The rate of thrombin receptor cleavage was proportional to thrombin concentration over the physiologic range, but low thrombin concentrations ultimately cleaved and activated all receptors. Cumulative phosphoinositide hydrolysis in response to thrombin correlated precisely with cumulative receptor cleavage. These data strongly suggest that each cleaved and activated thrombin receptor produces a "quantum" of phosphatidylinositol hydrolysis, then shuts off. Surprisingly, this shut off occurred despite the continued presence of cleaved and "activated" receptors on the cell surface and at a time when the cells were refractory to thrombin but sensitive to agonist peptide, suggesting that a novel shut off mechanism may have evolved to deal with the tethered ligand. Unlike the case with classical ligands, cells thus cannot detect differences in thrombin concentrations as differences in fractional occupancy but rather must sense different rates of receptor activation. Because each cleaved thrombin receptor generates a quantum of second messenger, the magnitude of the cell's response to thrombin must be determined by the balance between rates of receptor activation and second messenger clearance.