We recently developed a longer lasting recombinant factor VIII-Fc fusion protein, rFVIIIFc, to extend the half-life of replacement FVIII for the treatment of people with hemophilia A. In order to elucidate the biological mechanism for the elongated half-life of rFVIIIFc at a cellular level we delineated the roles of VWF and the tissue-specific expression of the neonatal Fc receptor (FcRn) in the biodistribution, clearance and cycling of rFVIIIFc. We find the tissue biodistribution is similar for rFVIIIFc and rFVIII and that liver is the major clearance organ for both molecules. VWF reduces the clearance and the initial liver uptake of rFVIIIFc. Pharmacokinetic studies in FcRn chimeric mice show that FcRn expressed in somatic cells (hepatocytes or liver sinusoidal endothelial cells) mediates the decreased clearance of rFVIIIFc, but FcRn in hematopoietic cells (Kupffer cells) does not affect clearance. Immunohistochemical studies show that when rFVIII or rFVIIIFc is in dynamic equilibrium binding with VWF, they mostly co localize with VWF in Kupffer cells and macrophages, confirming a major role for liver macrophages in the internalization and clearance of the VWF-FVIII complex. In the absence of VWF a clear difference in cellular localization of VWF-free rFVIII and rFVIIIFc is observed and neither molecule is detected in Kupffer cells. Instead, rFVIII is observed in hepatocytes, indicating that free rFVIII is cleared by hepatocytes, while rFVIIIFc is observed as a diffuse liver sinusoidal staining, suggesting recycling of free-rFVIIIFc out of hepatocytes. These studies reveal two parallel linked clearance pathways, with a dominant pathway in which both rFVIIIFc and rFVIII complexed with VWF are cleared mainly by Kupffer cells without FcRn cycling. In contrast, the free fraction of rFVIII or rFVIIIFc unbound by VWF enters hepatocytes, where FcRn reduces the degradation and clearance of rFVIIIFc relative to rFVIII by cycling rFVIIIFc back to the liver sinusoid and into circulation, enabling the elongated half-life of rFVIIIFc.