The c-kit proto-oncogene, the gene at the mouse W developmental locus, is one of a substantial group of genes that appear to encode cell surface receptors but for which the ligands are unknown. We have characterized the kit ligand by a generally applicable approach: the receptor extracellular domain was genetically fused to placental alkaline phosphatase, producing a soluble receptor affinity reagent with an enzyme tag that could be easily and sensitively traced. This fusion protein, APtag-KIT, was used to demonstrate a specific binding interaction (KD = 3 x 10(-8) M) with a ligand on 3T3 fibroblast lines. In situ staining showed labeling over the whole surface of the 3T3 cells, but not extending to adjacent nonexpressing cells. These findings provide direct molecular evidence that the kit ligand can exist as a cell surface protein. Binding was not detected on 3T3 fibroblasts carrying the steel (Sl) mutation, confirming the biological significance of the binding activity and demonstrating that mutations at the Sl locus affect the expression or structure of the kit ligand.