Keratinocyte growth factor (KGF or FGF-7) is a member of the heparin binding fibroblast growth factor (FGF) family and is a paracrine mediator of proliferation and differentiation of a wide variety of epithelial cells. To examine the stoichiometry of complexes formed between KGF and its receptor, we have utilized a soluble variant of the extracellular region of the KGF receptor containing two tandem immunoglobulin-like loops, loops II and III (sKGFR). Ligand-receptor complexes were examined by size exclusion chromatography, light scattering, N-terminal protein sequencing, and sedimentation velocity. In the presence of low-molecular mass heparin ( approximately 3 kDa), we demonstrate the formation of complexes containing two molecules of sKGFR and one molecule of KGF. In the absence of heparin, we were unable to detect any KGF-sKGFR complexes using the above techniques, and additional studies in which sedimentation equilibrium was used show that the binding is very weak (Kd >/= 70 microM). Furthermore, using heparin fragments of defined size, we demonstrate that a heparin octamer or decamer can promote formation of a 2:1 complex, while a hexamer does not. Utilizing the highly purified proteins and defined conditions described in this study, we find that heparin is obligatory for formation of a KGF-sKGFR complex. Finally, 32D cells, which appear to lack low-affinity FGF binding sites, were transfected with a KGFR-erythropoeitin receptor chimera and were found to require heparin to achieve maximal KGF stimulation. Our data are consistent with the previously described concept that cell- or matrix-associated heparan sulfate proteoglycans (HSPGs) and FGF ligands participate in a concerted mechanism that facilitates FGFR dimerization and signal transduction in vivo.