Heparin-binding growth factor 1 (HBGF-1), also known as acidic fibroblast growth factor, is a potent mitogen and angiogenic factor found in tissues such as brain, kidney and heart. The genomic and cDNA sequences indicate that HBGF-1 does not have a typical signal peptide sequence. HBGF-1 was shown to be localized to the extracellular matrix of cardiac myocytes, but the mechanism of secretion is not presently known. We have cloned the HBGF-1 cDNA which allowed us to directly test the biological activity, mechanism of secretion and transforming potential of the recombinant protein. A previous report showed that the truncated HBGF-1 confers partial transformed phenotype to the recipient fibroblasts. However, expression of full-length HBGF-1 has not been reported. The HBGF-1 coding sequence was cloned into the retroviral expression vector, SVX, and transfected into NIH/3T3 cells. Transfectants expressing full-length HBGF-1 protein at high levels form foci and grow to a higher cell density than the parental NIH/3T3 cells. Western blotting analysis showed that the recombinant HBGF-1 is a unique band of approximately 20 kDa and can be detected in the cell homogenate but not in the conditioned medium. NIH/3T3 cells were conferred anchorage independence when HBGF-1 was provided exogenously. We showed the transformed cells are capable of growing on soft agar even in the absence of exogenously-provided HBGF-1. Transfected cells expressing HBGF-1 also induced tumor formation when injected into nude mice. Thus NIH/3T3 cells acquired a full spectrum of transformed phenotype when full length HBGF-1 was expressed at high levels.