Basic fibroblast growth factor (bFGF) is a potent mitogen for human bone marrow stromal cells and stimulates haematopoiesis in vitro. We report here that primary human bone marrow cultures contain bFGF and express heparin-like bFGF binding sites on the cell surface and in the extracellular matrix (ECM). bFGF bound predominantly to a 200-kD cell surface heparan sulfate proteoglycan (HSPG), which was also found in conditioned medium. bFGF was released from bone marrow cultures by incubation with phosphatidylinositol-specific phospholipase C (PI-PLC) and, less efficiently, by plasmin. Solubilized bFGF was found as a complex with the 200-kD HSPG. The complex was biologically active as shown by its ability to stimulate plasminogen activator production in bovine aortic endothelial cells. bFGF-HSPG complexes of bovine endothelial cells, however, were not released by PI-PLC. While only trace amounts of the bFGF-binding 200-kD HSPG were released spontaneously from bone marrow cultures, incubation with PI-PLC solubilized almost all of the 200-kD HSPG. The HSPG could be metabolically labeled with ethanolamine or palmitate, which was partially removed by treatment with PI-PLC. These findings indicate linkage of the HSPG to the cell surface via a phosphatidylinositol anchor. Plasmin released the 200-kD HSPG less efficiently than PI-PLC. We conclude that HSPGs of human bone marrow serve as a reservoir for bFGF, from which it can be released in a biologically active form via a dual mechanism; one involving a putative endogenous phospholipase, the other involving the proteolytic cascade of plasminogen activation.