Fibroblast growth factors FGF-1 (aFGF) and FGF-2 (bFGF) are found in most embryonic and adult normal and tumor tissues, where they are immobilized in the extracellular matrix (ECM). Mobilization of these FGFs is part of a tightly controlled process resulting in the activation of high-affinity FGF receptors. Recently, we have shown that a secreted FGF-binding protein (FGF-BP) binds non-covalently to FGF-2 and is able to release it from the ECM. This process of growth factor bioactivation seems to play a pivotal role in the growth of squamous cell carcinomas, especially through induction of tumor angiogenesis. Since previous studies provided only indirect evidence for the proposed mechanism of FGF-BP-mediated FGF-2 release, we decided to use recombinant purified FGF-BP to study further the underlying mechanism of FGF-BP action. Here we show that FGF-BP is able to bind directly to FGF-2 without additional cofactors and to exhibit bioactivity. The purified recombinant FGF-BP stimulates tumor cell growth as well as endothelial cell growth and chemotaxis, indicating a dual growth-supporting role of FGF-BP in tumors. We show that this paracrine FGF-BP effect is dependent on endogenously expressed FGF-2, since it can be completely blocked by anti-FGF-2 antibodies. In tumor xenografts and in tumor cells, we detected a pattern of specific FGF-BP-immunoreactive high molecular weight forms, which presumably represent stable covalent complexes of FGF-BP and show marked differences in their occurrence in different tumors and in their heparin binding affinity. By providing further insight into the mechanism of FGF-BP action, our results emphasize the relevance of FGF-BP and of FGF-2 in tumor growth.