Heparin is required for the binding of basic fibroblast growth factor (bFGF) to high-affinity receptors on cells deficient in cell surface heparan sulfate proteoglycan. So that this heparin requirement could be evaluated in the absence of other cell surface molecules, we designed a simple assay based on a genetically engineered soluble form of murine FGF receptor 1 (mFR1) tagged with placental alkaline phosphatase. Using this assay, we showed that FGF-receptor binding has an absolute requirement for heparin. By using a cytokine-dependent lymphoid cell line engineered to express mFR1, we also showed that FGF-induced mitogenic activity is heparin dependent. Furthermore, we tested a series of small heparin oligosaccharides of defined lengths for their abilities to support bFGF-receptor binding and biologic activity. We found that a heparin oligosaccharide with as few as eight sugar residues is sufficient to support these activities. We also demonstrated that heparin facilitates FGF dimerization, a property that may be important for receptor activation.