Uncontrolled activation of the complement system against endothelial and blood cells is central to the pathogenesis of atypical hemolytic uremic syndrome (aHUS). aHUS patients frequently carry mutations in the inhibitory complement regulator factor H (FH). Mutations cluster in domains 19 and 20 (FH19-20), which are critical for recognizing self surfaces. On endothelial cells, binding of FH is generally attributed to heparan sulfate. This theory, however, is questioned by the puzzling observation that some aHUS-associated mutations markedly enhance FH binding to heparin and endothelial cells. In this article, we show that, instead of disturbed heparin interactions, the impaired ability of C-terminal mutant FH molecules to recognize sialic acid in the context of surface-bound C3b explains their pathogenicity. By using recombinant FH19-20 as a competitor for FH and measuring erythrocyte lysis and deposition of complement C3b and C5b-9 on endothelial cells and platelets, we now show that several aHUS-associated mutations, which have been predicted to impair FH19-20 binding to sialic acid, prevent FH19-20 from antagonizing FH function on cells. When sialic acid was removed, the wild-type FH19-20 also lost its ability to interfere with FH function on cells. These results indicate that sialic acid is critical for FH-mediated complement regulation on erythrocytes, endothelial cells, and platelets. The inability of C-terminal mutant FH molecules to simultaneously bind sialic acid and C3b on cells provides a unifying explanation for their association with aHUS. Proper formation of FH-sialic acid-C3b complexes on surfaces exposed to plasma is essential for preventing cell damage and thrombogenesis characteristic of aHUS.