The cell surface proteoglycan N-syndecan (syndecan 3) was isolated from neonatal rat brain. Purified brain N-syndecan had biochemical properties very similar to N-syndecan previously identified in Schwann cells: it contained mainly, if not exclusively, heparan sulfate glycosaminoglycan chains and had a core protein with an apparent molecular mass of 120 kDa by sodium dodecyl sulfate-gel electrophoresis. We examined the interactions between purified N-syndecan and extracellular ligands using a solid phase binding assay. It was found that among all proteins tested, including a variety growth factors and extracellular matrix molecules, only basic fibroblast growth factor (bFGF) exhibited significant N-syndecan binding. N-syndecan binding to bFGF was saturable and exhibited a KD = 0.5 nM. Soluble bFGF effectively competed with immobilized bFGF for binding to N-syndecan, indicating that these two proteins also interact in solution. Heparin and heparan sulfate, but not chondroitin sulfate, inhibited N-syndecan-bFGF binding. Isolated N-syndecan core protein did not exhibit significant binding to bFGF. Thus, the heparan sulfate chains of N-syndecan, rather than its core protein, appear to be responsible for binding to bFGF. Interestingly, acidic fibroblast growth factor, which is structurally similar to bFGF, did not exhibit significant N-syndecan binding. N-syndecan also did not bind to several other heparin-binding proteins used in this study, indicating a high degree of specificity for the N-syndecan-bFGF interaction. Both N-syndecan and bFGF are abundant in neonatal brain, suggesting that N-syndecan may function as a co-receptor for bFGF during nerve tissue development.