Protease-activated receptors (PARs) are G protein-coupled receptors that are activated by proteolytical cleavage of the amino-terminus and thereby act as sensors for extracellular proteases. While coagulation proteases activate PARs to regulate hemostasis, thrombosis, and cardiovascular function, PAR2 is also activated in extravascular locations by a broad array of serine proteases, including trypsin, tissue kallikreins, coagulation factors VIIa and Xa, mast cell tryptase, and transmembrane serine proteases. Administration of PAR2-specific agonistic and antagonistic peptides, as well as studies in PAR2 knockout mice, identified critical functions of PAR2 in development, inflammation, immunity, and angiogenesis. Here, we review these roles of PAR2 with an emphasis on the role of coagulation and other extracellular protease pathways that cleave PAR2 in epithelial, immune, and neuronal cells to regulate physiological and pathophysiological processes.