Perlecan is a multifaceted heparan sulfate proteoglycan that is expressed not only as an intrinsic constituent of basement membranes but also as a cell-surface and pericellular proteoglycan. Perlecan functions as a ligand reservoir for various growth factors that become stabilized against misfolding or proteolysis and acts as a co-receptor for basic fibroblast growth factor by augmenting high affinity binding and receptor activation. These biological properties are mediated by the heparan sulfate moiety. Rather little is known about the protein core's mediation of functions. We have recently discovered that fibroblast growth factor-7 (FGF7) binds to perlecan protein core and that exogenous perlecan efficiently reconstitutes FGF7 mitogenic activity in perlecan-deficient cells. In this report we examined the specific binding of FGF7 to various domains and subdomains of perlecan protein core. Using several experimental approaches including overlay protein assays, radioligand binding experiments, and the yeast two-hybrid system, we demonstrate that FGF7 binds specifically to the N-terminal half of domain III and to a lesser extent to domain V, with affinity constants in the range of 60 nM. Thus, perlecan protein core should be considered a novel biological ligand for FGF7, an interaction that could influence cancer growth and tissue remodeling.