Previous studies showed that cell surface heparan sulfate (HS) is involved in density-dependent growth regulation of normal human cells. In this study the effects of HS on proliferation of transformed cells were studied in vitro. Exogenously added HS prepared from normal tissues (rat kidney and bovine kidney) enhanced growth of transformed human and animal cells (gamma ray- or virus-transformed WI-38, and HeLa cells and chemically induced mouse hepatoma cells), but inhibited that of normal human and animal cells (WI-38, 3T3, and rabbit liver cells). HS was less effective on growth of both normal and transformed human cells at higher cell density. Although the exogenous HS did not bind to cells tightly, HS was found to affect cell growth not by modulation of growth-related substances in the medium, but through contact with the cell surface. HS preparation from tumour cells (mouse hepatoma cells) exerted similar effects on cell growth. Heparin, structurally similar to HS, inhibited growth of both normal and transformed human cells. These findings suggest that: 1. HS plays a particular function in contact regulation of cell proliferation. 2. Transformation-related changes in the structure of HS molecules do not much affect the function of HS. 3. The cellular transformation, however, is accompanied by alteration in the growth-regulating system sensitive to extracellular HS.