Despite possessing only 32 residues, the tsetse thrombin inhibitor (TTI) is among the most potent anticoagulants described, with sub-picomolar inhibitory activity against thrombin. Unexpectedly, TTI isolated from the fly is 2000-fold more active and 180 Da heavier than synthetic and recombinant variants. We predicted the presence of a tyrosine O-sulfate post-translational modification of TTI, prompting us to investigate the effect of the modification on anticoagulant activity. A combination of chemical synthesis and functional assays was used to reveal that sulfation significantly improved the inhibitory activity of TTI against thrombin. Using X-ray crystallography, we show that the N-terminal sulfated segment of TTI binds the basic exosite II of thrombin, establishing interactions similar to those of physiologic substrates, while the C-terminal segment abolishes the catalytic activity of thrombin. This non-canonical mode of inhibition, coupled with its potency and small size, makes TTI an attractive scaffold for the design of novel antithrombotics.