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Heparin cofactor II (HCII) is predominantly expressed in the liver and inhibits thrombin in blood plasma to influence the blood coagulation cascade. Its deficiency is associated with arterial thrombosis. Its cleavage by neutrophil elastase produces fragment that helps in neutrophil chemotaxis in the acute inflammatory response in human. In the present study, we have identified a novel alternatively spliced transcript of the HCII gene in human liver. This novel transcript includes an additional novel region in continuation with exon 3 called exon 3b. Exon 3b acts like an alternate last exon, and hence its inclusion in the transcript due to alternative splicing removes exon 4 and encodes for a different C‐terminal region to give a novel protein, HCII‐N. MD simulations of HCII‐N and three‐dimensional structure showed a unique 51 amino acid sequence at the C‐terminal having unique RCL‐like structure. The HCII‐N protein purified from bacterial culture showed a protein migrating at lower molecular weight (MW 55 kDa) as compared to native HCII (MW 66 kDa). A fluorescence‐based analysis revealed a more compact structure of HCII‐N that was in a more hydrophilic environment. The HCII‐N protein, however, showed no inhibitory activity against thrombin. Due to large conformational variation observed in comparison with native HCII, HCII‐N may have alternate protease specificity or a non‐inhibitory role. Western blot of HCII purified from large plasma volume showed the presence of a low MW 59 kDa band with no thrombin activity. This study provides the first evidence of alternatively spliced novel isoform of the HCII gene. [ABSTRACT FROM AUTHOR]