Tera 2 human embryonal carcinoma cells proliferate rapidly in culture but are capable of differentiating into quiescent cells with neuronal features. We have characterized the effects of exogenous and endogenous fibroblast growth factors on the proliferation of differentiating Tera 2 cells. Exogenous basic fibroblast growth factor (bFGF) stimulated DNA synthesis and induced the proliferation-associated antigen Ki 67 in differentiated Tera 2 cells. Heparin-binding growth factors isolated from the undifferentiated cells excerted a similar stimulatory effect on their differentiated derivatives. The functional potential of these endogenous growth factors was further demonstrated by their ability to stimulate plasminogen activator production by capillary endothelial cells. A major part of the growth promoting activity was removed by absorption with immobilized bFGF antibodies. bFGF was also detected in Tera 2 cells by immunoblotting. The production of heparin-binding growth-promoting activity decreased during differentiation. The results demonstrate a potential role for heparin-binding growth factors in the autocrine or paracrine growth regulation of teratocarcinoma cells.