Binding of fibroblast growth factors (FGFs) to receptor tyrosine kinases (FGFRs) and signaling is facilitated by binding of FGF to heparan sulfate proteoglycans (HSPGs). There are multiple families of HSPGs, including extracellular and cell surface forms. An important and potentially controversial question is whether cell surface forms of HSPGs act as positive or negative regulators of FGF signaling. This study examines the ability of the cell surface HSPG syndecan-1 to regulate FGF binding and signaling. HSPG-deficient Raji lymphoma cells, expressing a transfected syndecan-1 cDNA (Raji S1 cells), were used as HSPG "donor" cells. BaF3 cells, expressing an FGFR1 cDNA (FR1C-11 cells), were used as FGFR "reporter" cells. Using Raji S1 cells preincubated with FGF, it was found that they formed heterotypic aggregates with FR1C-11 cells in the presence of FGF-2, but not FGF-1. In addition, the FR1C-11 cells demonstrated FGF-2, but not FGF-1, dependent survival when cultured on fixed Raji S1 cells. Thus, Raji syndecan-1 1) differentially regulates the binding and signaling of FGFs 1 and 2 and 2) acts as a positive regulator of FGF-2 signaling.