Basic fibroblast growth factor (bFGF) is a known mitogen for vascular smooth muscle cells and has been implicated as having a role in a number of proliferative vascular disorders. Binding of bFGF to heparin or heparan sulfate has been demonstrated to both stimulate and inhibit growth factor activity. The activity, towards bFGF, of heparan sulfate proteoglycans present within the vascular system is likely related to the chemical characteristics of the glycosaminoglycan as well as the structure and pericellular location of the intact proteoglycans. We have previously shown that endothelial conditioned medium inhibits both bFGF binding to vascular smooth muscle cells and bFGF stimulated cell proliferation in vitro. In the present study, we have isolated proteoglycans from endothelial cell conditioned medium and demonstrated that they are responsible for the bFGF inhibitory activity. We further separated endothelial secreted proteoglycans into two fractions, PG-A and PG-B. The large sized fraction (PG-A) had greater inhibitory activity than did PG-B for both bFGF binding and bFGF stimulation of vascular smooth muscle cell proliferation. The increased relative activity of PG-A was attributed, in part, to larger heparan sulfate chains which were more potent inhibitors of bFGF binding than the smaller heparan sulfate chains on PG-B. Both proteoglycan fractions contained perlecan-like core proteins; however, PG-A contained an additional core protein (approximately 190 kDa) that was not observed in PG-B. Both proteoglycan fractions bound bFGF directly, and PG-A bound a significantly greater relative amount of bFGF than did PG-B. Thus the ability of endothelial heparan sulfate proteoglycans to bind bFGF and prevent its association with vascular smooth muscle cells appears essential for inhibition of bFGF-induced mitogenesis. The production of potent bFGF inhibitory heparan sulfate proteoglycans by endothelial cells might contribute to the maintenance of vascular homeostasis.