Fibroblast growth factors (FGF) regulate the growth and differentiation of cells through complex combinatorial signaling pathways. There are nine ligands that interact with a family of four tyrosine kinase FGF receptors (FGFR). Diversity in FGF signaling is determined in part by the affinity of specific ligand-receptor pairs. Alternative splicing in the FGFR ligand binding domain generates additional receptor isoforms with novel ligand affinities. For example, splicing events in the ligand binding domain of FGFR2 dramatically increases its affinity for keratinocyte growth factor (KGF/FGF-7). We have identified an alternatively spliced form of the FGFR3 mRNA, corresponding to known splice variants of FGFRs 1 and 2. We demonstrate both by binding studies on genetically engineered soluble receptors and by the mitogenic response of growth factor-dependent cell lines that this splice variant of FGFR3 (FGFR3 IIIb), by binding only acidic FGF (aFGF/FGF-1), has the most restricted ligand binding properties of any FGFR thus far described. Furthermore, by constructing a chimeric receptor that contains the homologous exon from FGFR2, we demonstrate that this single domain from FGFR2 is sufficient to confer upon FGFR3 the ability to bind KGF/FGF-7. The uniquely limited repertoire of ligands that interact with this receptor suggests that a novel ligand for FGFR3 IIIb exists.