Although the role of agrin in the formation of the neuromuscular junction is well established, other functions for agrin have remained elusive. The present study was undertaken to assess the role of agrin in neurite outgrowth mediated by the heparin-binding growth factor basic fibroblast growth factor (FGF-2), which we have shown previously to bind to agrin with high affinity and that has been shown to mediate neurite outgrowth from a number of neuronal cell types. Using both an established neuronal cell line, PC12 cells, and primary chick retina neuronal cultures, we find that agrin potentiates the ability of FGF-2 to stimulate neurite outgrowth. In PC12 cells and retinal neurons agrin increases the efficacy of FGF-2 stimulation of neurite outgrowth mediated by the FGF receptor, as an inhibitor of the FGF receptor abolished neurite outgrowth in the presence of agrin and FGF-2. We also examined possible mechanisms by which agrin may modulate neurite outgrowth, analyzing ERK phosphorylation and c-fos phosphorylation. These studies indicate that agrin augments a transient early phosphorylation of ERK in the presence of FGF-2, and augments and sustains FGF-2 mediated increases in c-fos phosphorylation. These data are consistent with established mechanisms where heparan sulfate proteoglycans such as agrin may increase the affinity between FGF-2 and the FGF receptor. In summary, our studies suggest that neural agrin contributes to the establishment of axon pathways by modulating the function of neurite promoting molecules such as FGF-2.