Basic fibroblast growth factor is a potent mitogen for a variety of cell types and has been suggested to have transforming activity. To test this hypothesis, we have introduced a human bFGF cDNA into NIH 3T3 cells either by DNA transfection or by retrovirus infection. We have compared the properties of cell lines obtained with cells prepared similarly but expressing the hst/K-fgf growth factor. While bFGF does not contain an amino terminal signal sequence and is not secreted from cells in which it is synthesized, hst/K-fgf does contain a signal sequence and is secreted from cells. Our results show that the transformed phenotype correlates directly with the level of bFGF expression, since all transformed clones expressed high levels of bFGF, while nontransformed clones expressed comparatively low levels of bFGF. In contrast, even low levels of hst/K-fgf expression resulted in a transformed phenotype. These results suggest that bFGF is an inefficient transforming protein and that this may relate to its lack of secretion.