The fibroblast growth factors (FGFs) act through high affinity tyrosine kinase receptors and, in addition, interact with lower affinity receptors that represent cell- or matrix-associated heparan sulfate proteoglycans. These lower affinity receptors modulate the biological activities of FGFs, but the mechanism by which they exert these effects is rather controversial. We have previously shown (Ron, D., Bottaro, D. P., Finch, P. W., Morris, D., Rubin, J. S., and Aaronson, S. A. (1993) J. Biol. Chem. 268, 2984-2988) that heparin potentiates the mitogenic activity of acidic FGF (aFGF) but inhibits that of the keratinocyte growth factor (KGF) in cells that express the KGF receptor (KGFR). Both growth factors bind the KGFR with high affinity. To gain an insight into the mechanism by which heparin modulates the biological activity of aFGF and KGF, we studied the effect of heparin and cell-associated heparan sulfates on the binding of these two growth factors to the KGFR. To work in a well defined system, we expressed functional KGFR in L6E9 myoblasts that lack detectable high affinity binding sites for FGFs. Low concentrations of heparin inhibited the binding of KGF to the KGFR. By contrast, similar concentrations of heparin enhanced the binding of aFGF to this receptor. The effect of heparin was not unique to L6E9 cells expressing the KGFR; it was also observed in Balb/MK cells that naturally express KGFR. Treatment of cells with sodium chlorate, which blocks sulfation of proteoglycans, reduced the binding of aFGF to its low and high affinity binding sites by 95 and 80%, respectively. In contrast, the binding of KGF to its high affinity binding sites was enhanced about 2-fold. Similar results were obtained after degradation of cell-associated heparan sulfates by heparinase and heparitinase. Heparin restored the high affinity binding of aFGF to chlorate-treated cells and completely abolished the high affinity binding of KGF. Binding competition experiments suggest that aFGF and KGF bind to the same population of cell-associated heparan sulfates. In addition, KGF is apparently interacting with an as yet unidentified type of low affinity binding site that is not affected by chlorate or heparan sulfate-degrading enzymes. An important property of the FGF high affinity receptors is their ability to bind more than one ligand with high affinity. Based on the differential effect of cell-associated heparan sulfates on the binding of KGF and aFGF to the KGFR, we propose a regulatory role for cell-associated heparan sulfates as coordinators of the interaction of aFGF and KGF with the KGFR.(ABSTRACT TRUNCATED AT 400 WORDS)